Even the Rich Can't Afford Luxury Anymore

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Dec. 24 (Bloomberg) –- On today's "Chart Attack," Davidowitz & Associates' Howard Davidowitz and Bloomberg's Adam Johnson look at the price for luxury goods on Bloomberg Television's "Street Smart. (Source: Bloomberg)

Time for chart attack.

A couple charts to make you smarter.

Luxury items getting too expensive, even for the guys with a lot of money.

Chanel, christian dior, louis vuitton.

Look at that bag.

Now it is $4900. serious inflation.

It is still the same letter.

-- same leather.

The rising costs of leather, bloomberg tracks letter prices and exotic hides.

There is the index.

Going up.

The question is whether prices are going up at the retail level faster.

Howard davidowitz, why is it -- in the chanel bag example, doubling in price in three years.

The luxury people are going to get as much as they can get and they can get it.

I do not have to tell you what is going on with wealth exploding.

I think they are going to hit the wall.

If you take an area like accessories, on fire.

You can sell it for anything.

Hermes has those $15,000 handbags.

They create the scarcity.

This stuff is going out like mad.

The prices keep going up.

Here is the problem, there will be a problem.

If you are selling a cashmere sweater for three times what it is worth, i will not mention the store's name.

You mean what it costs to make?

Compared to j.crew.

You got something at a j.crew quality and j.crew is a private label.

You are selling it at three times the price.

The thickness of the cashmere is no more than j. crew -- back to the handbag, this does annoy me.

Look at louis vuitton.

Up 12% since february, give me a break.

It is the same bag.

Is it the currency affect?

Opportunistic?

Opportunistic, taking advantage of the explosiveness of the handbag business and accessory business.

Which happens to be the hottest area in retail.

Is that because of -- unemployment is down from 10%. it is still high.

If you have some money to spend, instead of going out and buying a new house, are you going to buy -- , on -- come on.

That is absurd.

A handbag instead of a house.

The average condominium in new york is $1.3 million.

That is average.

It is aspirational, isn't it?

That person that maybe could not afford, maybe this is to your point.

You cannot afford the apartment, but you can't afford the handbag.

-- you can afford the handbag.

The handbag is a status symbol that says you could afford the condo.

I go to restaurants where women are showing the bag.

They want everyone to -- my wife is telling me this one is real, that is a fake.

This is -- the handbag is a big deal.

If it is a big deal to your wife -- you are going to get her one.

Forget the price.

This text has been automatically generated. It may not be 100% accurate.

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