ET Insider – July 7, 2008

Elite Traveler Insider –

July 7, 2008

Elite Traveler Insider

By Douglas D. Gollan, President and Editor-in-Chief, Elite Traveler Magazine  

Welcome to the latest issue of Elite Traveler Insider, the bi-weekly newsletter designed to update our top partners on trends in the private jet lifestyle. This information is provided to offer a better understanding of how to target these globetrotting elite travelers, their impact on your business and other trends that affect you. Remember, private jet travelers are paying up to $10,000 per hour to fly by private jet, so these super rich consumers could be and should be your best customer. We talk about them and how you can get more of them and more from them.

CONTENTS:

1. Notes from Florence’s Men’s Fashion Trade Show

2. In Los Angeles, Despite Mortgage Woes for the Masses, Houses Get Bigger

3. Gulfstream Boosts Production

4. Elite Traveler Readers Keep on Buying

5. The First Billion Dollar Home

6. Tom Cruise, $212,000, and his new DeWitt watch

Over 90 percent of today’s Super Rich are Self Made and over 80 percent of the Super Rich have made their fortune in the past 10 years. Now is the best time to make sure they know your brand. 86% believe Elite Traveler is a good showcase for luxury products.

1. Notes from Florence’s Men’s Fashion Trade Show

Perhaps the U.S. economy is on its way to a bigger collapse, as the cover story of Newsweek International proposed a couple of weeks ago (Why This One’s Different – And May Last Longer), or perhaps if one keeps a stiff upper lip, the light at the end of the tunnel might be the next bull market instead of an oncoming train, as Burt Tansky, head of Neiman Marcus hoped, when I had a chance to chat with him in Florence.

With Brioni reporting record profits and sales growth leading into the semi-annual Pitti Uomo fair (which now has a small but growing women’s segment), life at the top of the fashion pyramid still seems to be stellar even as mass brands are having their foundations shaken and aspirational consumers have gone into hibernation.

Any bad news seemed far away as Tansky was given the keys to Florence for his support of Italian designers, and he humbly thanked his vendors for helping push his company to new heights through their creativity.

Indeed, with typical flair, Kiton introduced sunglasses with gold that can even be personally engraved for the owner, starting at $6,000, while Stefano Ricci was showing off baseball caps in ostrich and crocodile, ranging from $2,500 to $4,500.

Wanda Ferragamo recalled a post World War II trip to Dallas that started with a crossing on the Queen Mary and then a train from New York to Texas. For many here, fashion has been in their blood since they were born, which I can’t say for myself. It made me think about how industries tend to be insular. Most airline executives have spent their careers in the airline business; the same can be said for watchmakers, and certainly fashion is the same if not more. I can plead guilty as the son of a journalist who started writing for local papers when I was 14. Yes, for me journalism and publishing is in my blood, and sometimes I guess it makes me see things through rose-colored glasses.

Fashion savvy my family wasn’t. My father was a very successful Scottish immigrant who did well for himself but never lost his sensibility when it came to spending. When I graduated college, he took me to Bancroft (which was the same place he shopped) where he bought me five of their $119 suits. He certainly could have afforded to head up Fifth Avenue a bit to Bergdorf Goodman, but he never did; to be honest, before starting Elite Traveler, I had never set foot in this temple of luxury and fashion.

It was a world apart from the story Mike Cohen, the CEO of Oxxford, told me when I visited his stand. A wealthy customer who typically spends six figures annually casually mentioned to him that his 17 year-old son would be dropping by the next day to pick up some items before heading back to school. The young scion, Cohen said, was polite, composed and confident as he plucked pieces that ranged into the thousands of dollars each.

So my trip to under the hot Tuscan sun in the old Fortress that houses the show brought me to think about several points:

• Do the people who love fashion make the best customers? After all, I would like nothing more than having a private jet, but the salesman for the private jet company that spent his time talking to me would go home hungry. I just can’t fit a plane into my budget.
• Are the wealthiest and potentially most important customers for these houses as knowledgeable as they could be about what they might be missing out on?
• Is fashion missing an opportunity with the Super Rich?

I think it is important to understand a couple things about today’s Super Rich before drawing conclusions:

• 95% or more are self-made, and typically are between 30 and 55, so they have acquired their wealth at a much younger age than past generations of Super Rich. This means that they carry none of the baggage about spending their fathers did, if their fathers even had the choice, since many of today’s Super Rich come from Middle Class households.
• 85% of the Super Rich have achieved their status in the past 5-10 years, so prior to achieving their wealth, they were not fashionistas, but entrepreneurs and fast-climbing executives who were focused on getting to the top – you know, the “tech geeks” and others where it is often wondered why they don’t dress better.

In fact, Harry Rosen Chairman Larry Rosen told me over dinner (on the lawn of a Tuscan villa hosted by Brunello Cucinelli) about two partners who came into his stored referred by a friend. The partners had just made a fortune in mining or some other non-glamour industry, and a friend told them now that they were worth tens of millions they needed to work on their appearance. One gentleman spent over $100,000 and the other about half that, and both kept coming back.

I always say it isn’t Bill Gates’ fault that he wears a Timex. I look at it instead as an industry opportunity.

As I was sitting with Niccolo Ricci, whom I consider one of the industry’s rising stars, he in my opinion hit the nail on the head when it comes to marketing. “I would rather find one new customer that buys 50 suits a year than 50 customers who buy one suit,” he noted.

With all reports showing that the Super Rich are getting ever richer and the concentration of wealth with the top one-half of one-percent has never been stronger, I think there is a tremendous sales growth opportunity for smart luxury fashion houses to focus on luring these Super Rich.

Doing our part, Elite Traveler just launched Best of Italian Menswear Guide, based on our Editorial Director Laura Hughes’ visit to the January shows of Florence and Milan which can now be accessed on our web site. Click here to download the guide.

We have also introduced a new and improved consumer web site that will keep Men’s Fashion front and center with our private jet traveling readers. In each issue of Elite Traveler, we have live fashion shoots to help educate these Super Wealthy readers on how fashion can and should be part of their private jet lifestyle.

With our fast growing Luxus Networks, we have introduced the opportunity for fashion brands to create top-of-mind awareness through back lit Duratran billboards in private jet terminals, plus education through our 60-minute loop of private jet lifestyle programming that plays on flat screen televisions in the private jet terminal lounges. In fact, we are launching the opportunity to have fully styled mannequins placed in the terminals along with collateral distribution.

Any high-end retailer will tell you that the Super Rich shopper, at least the male variety, likes to do it quickly. I believe that with our combination of media activities, we can truly educate and motivate these Super Rich consumers to spend more with these wonderful houses.

As for my love of fashion, I can say after my fourth Pitti Uomo show I have become a bit of a fashionista as it is extraordinary to hear the stories and understand what makes these creations so special. For the many top houses, the good news is that there is an ever-growing Super Rich population than can not only admire their collections but can also become their best clients.

Over 90 percent of today’s Super Rich are Self Made and over 80 percent of the Super Rich have made their fortune in the past 10 years. Now is the best time to make sure they know your brand. 86% believe Elite Traveler is a good showcase for luxury products.

2. In Los Angeles, Despite Mortgage Woes for the Masses, Houses Get Bigger

Unaffected by the economic woes besetting the masses, the super-rich are continuing to create palace-like complexes. One builder says he knows of 20 houses of at least 20,000 square feet in the works, according to a recent story in The Los Angeles Times.

The story continues, “In Beverly Hills, a 32,000-square-foot beaux-arts mansion that will be sheathed in Portuguese limestone and adorned with gold-plated doorknobs fashioned in France is rising on Sunset Boulevard.

“A few miles away in Bel-Air, businessman Eri Kroh has requested permits to lop off the top of a hill, fill in a canyon and then, after moving some 68,000 cubic yards of dirt, replace the chaparral-covered lot with a 30,000-plus square-foot single family home with Pacific Ocean views.

“Just down the hill, workers recently were building retaining walls for a giant lot that real estate experts say could soon feature one or two giant palace-like homes.

“Anyone who assumed that the construction of mega-mansions would grind to a halt as the economy worsens must not be familiar with the customs of the very rich.

“‘Does anybody need 40,000 square feet?’ asks real estate agent Stephen Shapiro of the Westside Estate Agency. ‘No, [but] these are our current-day aristocrats and feudal leaders . . . and this is what they want.’

“Builder John Finton, who is overseeing construction of the 32,000 square-foot house on Sunset Boulevard for businessman C. Frederick Wehba Sr. and his wife, Susan, said he knows of at least 20 20,000-plus square-foot homes under construction or about to break ground in what he called the “platinum triangle” of wealthy areas in Los Angeles County: Beverly Hills, Bel-Air and Holmby Hills.

“Real estate agent Drew Fenton said that no one sets out to build a mega-house; it just happens.

“‘You keep adding the rooms you think you need. The ballroom. The screening room. Masters with his and hers and a beauty salon and a massage room. And the house keeps growing.’ Added Fenton: ‘I can’t explain why someone needs a gift-wrapping room or a florist room. That is a question of culture.’

“If there are 20 residences of 20,000-plus square feet in the works for Los Angeles County, it would represent a surge of mega-mansions. According to records from the Los Angeles County assessor, there are fewer than 60 homes with more than 20,000 square feet in the county and fewer than 10 with more than 30,000.

“Still, real estate agents said assessor records aren’t always accurate because they may not measure pool houses, cabanas and other similar living spaces.

“As homes have sold and the area has grown in cachet, some people have torn down and replaced with what one resident calls “casino-style Tuscan villas.”

“This, in turn, has transformed the neighborhood, many long-time residents say.

“‘We used to know all our neighbors,’ said Robert Cremer, a retired engineer. ‘We’d socialize with them. If they had a project, moving furniture, we’d help them out. The sort of thing neighbors do doesn’t exist anymore.'”

While the world’s economy today is unsteady, one thing is for sure: The wealthy consumers flying aboard private jets are your best bet, and only Elite Traveler delivers these elite travelers to our advertisers through our BPA audited circulation aboard private jets in over 100 countries, including Russia, the UAE, Kuwait, Qatar, Bahrain, Oman, India, Singapore, Korea and China. All with one ad buy!

3. Gulfstream Boosts Production

Yes, the U.S. airlines and even others are grounding planes and cutting flights as soaring fuel costs make flying many routes a losing proposition. Of course, the private jet market is different.

From our ever traveling International Advisor Mary Gostelow, “Gulfstream has announced a deal with Israeli Aircraft Industries to boost production of its smaller G200 and G150 aircraft. Gulfstream President Joe Lombardo told a news conference in Israel several weeks ago that the Israeli company will make at least 70 jets this year, up from 58 in 2007 and almost three times the production in 2006. “Rising fuel prices don’t seem to be impacting our sales,” Lombardo told reporters at IAI’s headquarters at Ben-Gurion Airport. “Demand remains high. Furthermore, the dollar’s decline signifies higher sales to our international customers.”

Elite Traveler’s BPA audited circulation aboard private jets and mega-yachts in over 100 countries means your ad is guaranteed to reach the highest spending luxury audience in the world no matter where they are from and where they happen to be today – each issue is read by 318,000 readers with a Household Income of $1 million +, the highest of any magazine or newspaper in the world! Sources: 2007 Prince ET/MMR for others

4. Elite Traveler Readers Keep on Buying

While the readers of Mass Affluent publications (any magazine with a Median Household under $200,000 according to MMR’s research – for example, Robb Report, Departures, Town & Country, W, Conde Nast Traveler, Travel + Leisure, etc.) are finding that their readers are getting hammered by the mortgage meltdown, rising prices for gas and commodities, and increased layoffs, Elite Traveler’s elite travelers are still flying high with our BPA audited distribution in over 100 countries worldwide aboard private jets. Here are just some of the “private jet lifestyle” purchases readers have made in the past 60 days alone!

Mr. D. H. from Fayetteville, NY spent $7,000 on a Carl F. Bucherer watch

Ms. K. B. from Columbus, OH spent $21,000 on a Chopard Ladies Diamond watch

Mr. R. J. From Miami, FL spent $19,000 Chopard a “Luc” watch

Ms. S. S. from Belvedere, CA spent over $23,000 on a one-of-a-kind Escada gold snakeskin overcoat

Mr. P. M. from Philadelphia, PA spent $4,725 on a Girard-Perregaux “Seahawk II” watch

Mr. S. S. from New York, NY spent $14,000 on a Girard-Perregaux “Elegance” watch

Mr. C. F. from Bradenton, FL spent $11,000 on a Girard-Perregaux “Lady WW.TC” watch

Mr. B. E. from Chicago, IL spent $22,000 on a Hublot “Big Bang” watch

Mr. K. K. from Palm Beach Gardens, FL spent $4,500 on a Louis Vuitton handbag

Mr. A. B. of Oyster Bay, NY spent $147,000 on a Maserati Quattroporte Sport GT

Mr. M. D. of Clermont, FL spent $4,000 on a strand of Mikimoto pearls

Mr. J. V. of San Francisco, CA spent over $7,400 on clothing, accessories, and home furnishings at a Ralph Lauren boutique

While the world’s economy today is unsteady, one thing is for sure: The wealthy consumers flying aboard private jets are your best bet, and only Elite Traveler delivers these elite travelers to our advertisers through our BPA audited circulation aboard private jets in over 100 countries, including Russia, the UAE, the U.S., Mexico, Brazil, Kuwait, Qatar, Bahrain, Oman, India, Singapore, Korea and China. All with one ad buy!

5. The First Billion Dollar Home

Courtesy of the Associated Press, we bring you this breaking news on uber spending by the Super Rich. So next time you read one of our Top Suites stories, remember we are inspiring the Super Rich:

“While visiting New York in 2005, Nita Ambani was in the spa at the Mandarin Oriental New York, overlooking Central Park. The contemporary Asian interiors struck her just so, and prompted her to inquire about the designer.

Nita Ambani was no ordinary tourist. She is married to Mukesh Ambani, head of Mumbai-based petrochemical giant Reliance Industries, and the fifth richest man in the world. (Lakshmi Mittal, ranked fourth, is an Indian citizen, but a resident of the U.K.)

Forbes estimated Ambani’s net worth at $43 billion in March. Reliance Industries was founded by Mukesh’s father, Dhirubhai Ambani, in 1966, and is India’s most valuable firm by market capitalization. The couple, who have three children, currently live in a 22-story Mumbai tower that the family has spent years remodeling to meet its needs.

Like many families with the means to do so, the Ambanis wanted to build a custom home. They consulted with architecture firms Perkins + Will and Hirsch Bedner Associates, the designers behind the Mandarin Oriental, based in Dallas and Los Angeles, respectively.

Plans were then drawn up for what will be the world’s largest and most expensive home: a 27-story skyscraper in downtown Mumbai with a cost nearing $2 billion, says Thomas Johnson, director of marketing at Hirsch Bedner Associates. The architects and designers are creating as they go, altering floor plans, design elements and concepts as the building is constructed.

The only remotely comparable high-rise property currently on the market is the $70 million triplex penthouse at the Pierre Hotel in New York, designed to resemble a French chateau, and climbing 525 feet in the air. When the Ambani residence is finished in January, completing a four-year process, it will be 550 feet high with 400,000 square feet of interior space.

The home will cost more than a hotel or high-rise of similar size because of its custom measurements and fittings: A hotel or condominium has a common layout, replicated on every floor, and uses the same materials throughout the building (such as door handles, floors, lamps and window treatments).

The Ambani home, called Antilla, differs in that no two floors are alike in either plans or materials used. At the request of Nita Ambani, say the designers, if a metal, wood or crystal is part of the ninth-floor design, it shouldn’t be used on the eleventh floor, for example. The idea is to blend styles and architectural elements so spaces give the feel of consistency, but without repetition.

Antilla’s shape is based on Vaastu, an Indian tradition much like Feng Shui that is said to move energy beneficially through the building by strategically placing materials, rooms and objects.

Atop six stories of parking lots, Antilla’s living quarters begin at a lobby with nine elevators, as well as several storage rooms and lounges. Down dual stairways with silver-covered railings is a large ballroom with 80% of its ceiling covered in crystal chandeliers. It features a retractable showcase for pieces of art, a mount of LCD monitors and embedded speakers, as well as stages for entertainment. The hall opens to an indoor/outdoor bar, green rooms, powder rooms and allows access to a nearby “entourage room” for security guards and assistants to relax.

Ambani plans to occasionally use the residence for corporate entertainment, and the family wants the look and feel of the home’s interior to be distinctly Indian; 85% of the materials and labor will come from outside the U.S., most of it from India.

Where possible, the designers say, whether it’s for the silver railings, crystal chandeliers, woven area rugs or steel support beams, the Ambanis are using Indian companies, contractors, craftsmen and materials firms. Elements of Indian culture juxtapose newer designs. For example, the sinks in a lounge extending off the entertainment level, which features a movie theater and wine room, are shaped like ginkgo leaves (native to India) with the stem extending to the faucet to guide the water into the basin.

On the health level, local plants decorate the outdoor patio near the swimming pool and yoga studio. The floor also features an ice room where residents and guests can escape the Mumbai heat to a small, cooled chamber dusted by man-made snow flurries.

For more temperate days, the family will enjoy a four-story open garden. In profile, the rebar-enforced beams form a “W” shape that supports the upper two-thirds of the building while creating an open-air atrium of gardens, flowers and lawns. Gardens, whether hanging hydroponic plants, or fixed trees, are a critical part of the building’s exterior adornment but also serve a purpose: The plants act as an energy-saving device by absorbing sunlight, thus deflecting it from the living spaces and making it easier to keep the interior cool in summer and warm in winter. An internal core space on the garden level contains entertaining rooms and balconies that clear the tree line and offer views of downtown Mumbai.

The top floors of entertaining space, where Ambani plans to host business guests (or just relax) offer panoramic views of the Arabian Sea.

Over 90 percent of today’s Super Rich are Self Made and Over 80 percent of the Super Rich have made their fortune in the past 10 years. Now is the best time to make sure they know your brand. 86% believe Elite Traveler is a good showcase for luxury products.

6. Tom Cruise, $212,000, and his new DeWitt watch

I am pleased to let you know that DeWitt is a regular advertiser in Elite Traveler, so I was particularly happy to hear Tom Cruise just bought his own DeWitt watch – a Tourbillon Force Constante in Rose Gold from David Orgell in Beverly Hills.

The pricey watch is a limited edition with only 99 watches made. It retails for $212,000 and features a mechanical, self-winding movement, brown alligator strap and rose gold face and clasp. The haute brand of watches is designed by Jerome de Witt, a philanthropist and direct descendant of Napoleon – each watch pays homage to the ancestor with the imperial columns which also resemble a mechanical gear on the face of the watch.

Luxus Networks can bring your brand front and center with the world’s wealthiest consumers in over 100 private jet terminals throughout North America. Programs start from $1,000 per month. Contact Kimaada LeGendre at klegendre@elitetraveler.com for more information!