Tempting rich America with the best of British

WHO wants to be a millionaire when you can be a pentamillionaire?

According to research firm Spectrum Group, which specialises in studying the ultra-affluent, the number of American pentamillionaires - people worth $5 million (3.5 billion) or more - has grown by 45% a year since 1994.

Meanwhile, mere millionaires now make up more than seven million American households.

According to a recent survey, these rich consumers want luxury travel, fine jewellery and watches, cars and home furnishings.

Hoping to take advantage of this conspicuous consumption is the newly formed British Luxury Council (BLC), which is backed by the Department of Trade & Industry and British Trade International. It will target the American superrich and try to persuade them to buy luxury British goods such as fashion and jewellery.

It is run by Philip Gunn, a former executive at advertising agency J Walter Thompson and the man who helped Jo Malone launch her upmarket cosmetics and toiletries range.

He says "British luxury goods and services have a high reputation in the US, but in current market conditions there is lots of potential for further growth."

The BLC will provide advice, information, contacts, help with advertising and PR, and take companies to the relevant luxury trade shows abroad, where they can meet retailers.

"We will also be launching a British luxury magazine targeted at wealthy Americans which will showcase British companies. We already have a database of 55,000 of the richest Americans, to whom it will be sent," says Gunn.

He says that British companies have not got the most out of the American market. "Even for well-established companies, it's often not easy to break into foreign markets successfully," he says.

He adds that companies sometimes make fundamental errors. "They are sometimes completely clueless about things such as distribution, warehousing and even pricing, and that is where we can help."

As part of a pilot scheme The BLC took a group of leading British jewellers to an upmarket trade show in Arizona.

"It was very successful. For example, jeweller Stephen Webster has increased his sales in the US by 2000%," says Gunn.

Americans tend to think of British luxury goods in terms of traditional old-school brands such as Rolls-Royce and Asprey & Garrard, according to research from New York-based advertising agency Young & Rubicam.

"They want luxury goods that have a sense of heritage and their attitude is 'I don't mind spending money on something I can leave to my children'," says an agency spokesman.

However, the BLC is also keen to promote "funkier" names, such as that of jeweller Theo Fennell, who sells, among other items, silver Viagra holders.

"The older, more established brands are still hugely important but there is also a new wave of British luxury goods," says Gunn.

After America, the BLC will focus on other playgrounds of the rich. "We are looking at the United Arab Emirates, for obvious reasons, Japan, because the market there shows all signs of picking up, and also European countries such as Germany," he says.

Copyright 2001
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