According to Unity Marketing, Luxury Consumers Spent More Buying Luxuries in the Second Quarter, but Consumer Confidence Wavered.

Luxury Consumer Expenditures Rose 9 Percent in Second Quarter, but Their Confidence in Future Expectations Declined from Earlier This Year According to Unity Marketing

STEVENS, Pa. -- Affluent consumers went on a spending spree for luxuries in the second quarter 2007. The typical luxury consumer spent $15,283 buying luxury goods and services during the second quarter, 9 percent more than the average expenditure of $14,024 in the first quarter. This according to the results of Unity Marketing's Luxury Tracking survey of 1,000 affluent consumers conducted at the close of the second quarter 2007 (average income $155,500 and average age 44.3 years).

Industries benefiting from increased luxury consumer's spending included:

* Luxury electronics (average spending rose 14.5 percent); home decor fabrics, wall and window coverings (61.5 percent) ; kitchen appliances (8.4 percent); linens and bedding (11.4 percent) and tabletop (42.5 percent) in the luxury home sector.

* Luxury fashion accessories (28 percent increase); cosmetics and beauty products (33.8 percent); jewelry (54.6 percent) and watches (20.3 percent); and wine and spirits (12 percent) in the personal luxury sector.

* Luxury automobiles (13.8 percent increase); and

* Luxury dining (23.1 percent increase), entertainment (52.9 percent), and travel (21.4 percent), all in the luxury experiences sector.

(Note to media: Charts, tables and graphs, including detailed data about luxury consumer spending on request.)

For more information on the Luxury Tracking Study, visit http://www.unitymarketingonline.com/cms_luxury/luxury/luxury3/Luxury_T racking_2Q2007.php (Due to its length, this URL may need to be copied/pasted into your Internet browser's address field. Remove the extra space if one exists.)

Luxury Consumption Index Drops by 4 points

While spending went up in the second quarter, luxury consumers' confidence as measured by future spending intent was at its lowest level in over a year. This factored most strongly in the 4 point decline in the Luxury Consumption Index to 96.2 points.

Commenting on this quarter's index, Tom Bodenberg, Unity Marketing's economic forecaster, said, "With spending going up this quarter while confidence went down, this suggests an 'eat, drink and be merry' attitude for now, as these consumers foresee some cloudy patches ahead. The decline in future expectations can be accounted for by uncertainty in the housing market, instability from the increasingly tense Iraqi/Iranian situation, and the continued high price of refined petroleum and uncertainty about the energy supply."

There is a silver lining to the doom-and-gloom forecast for the luxury market and that is the young affluents, aged 40 years old and younger. Pam Danziger, president of Unity Marketing, explains, "The most aggressive future buying lies with the younger, upper-most income segments of the luxury population. As opposed to the older luxury consumers, the young affluents are more likely to see their financial situation improving over the next twelve months which gives them greater confidence to spend more on the luxuries they desire."

"In the second quarter the young affluents also continued their aggressive purchasing of luxuries, spending 39 percent more on average buying luxuries as compared to those over 40 years old. For luxury marketers concerned with their future, the passions and desires of the young affluents -- what I call the 'Want-It-All' generation -- is where they need to focus their marketing planning and strategies," Danziger says.

For more information on the young affluent market segment, see Unity Marketing's Generations of Luxury report, a vital guide for luxury marketers to understand the new generation of luxury consumers. Use this link http://www.unitymarketingonline.com/cms_luxury/luxury/insights_study.p hp (Due to its length, this URL may need to be copied/pasted into your Internet browser's address field. Remove the extra space if one exists.)

About Pam Danziger and Unity Marketing

Pamela N. Danziger is a nationally recognized expert specializing in consumer insights, especially for marketers and retailers that sell luxury goods and experiences to the masses or the 'classes.' She is president of Unity Marketing, a marketing consulting firm she founded in 1992.

Advising such clients as PPR, Diageo, Stearns & Foster, Waterford/Wedgwood, Lenox, Prudential Fine Homes, Ritz Carlton, Orient-Express Hotels, The World Gold Council, The Conference Board and American Express, Danziger taps consumer psychology to help clients navigate and master the changing luxury consumer marketplace.

In recognition of her ground-breaking work in the luxury consumer market, Pam received the Global Luxury Award presented by Russia's Harper's Bazaar for top luxury industry achievers in 2007.

Her latest book is Shopping: Why We Love It and How Retailers Can Create the Ultimate Customer Experience, published by Kaplan Publishing in October 2006. Her other books include Let Them Eat Cake: Marketing Luxury to the Masses--as well as the Classes, (Dearborn Trade Publishing, $27, hardcover) and Why People Buy Things They Don't Need: Understanding and Predicting Consumer Behavior (Chicago: Dearborn Trade Publishing, 2004).