where has all the money gone 02031012

“Wh h ll th“Where has all the money gone,long time passing…”

VersaillesFebruary, 2012February, 2012

Christopher P RameyChristopher P. RameyPresident, Affluent Insights

561.876.8077 cpr@affluentinsights.com

h ffl d ll lWe serve the affluent and sell luxurybecause that’s where the money is.

2010 & 2011 were very good years for personal luxuryvery good years for personal luxury

2004 136 €B2005 1472006 1592007 1702008 1672009 1532009 1532010 1732011 1912011 191

Bain & Company for Altagamma

Survivor: Versailles IslandSurvivor: Versailles Island

How many affluent individuals are there in the world?the world?

1 ~ 10 900 0001. ~ 10,900,0002. ~ 16,500,0003 18 500 0003. ~ 18,500,000

Capgemini Merrill Lynch World Wealth Report 2011

Survivor: Versailles IslandSurvivor: Versailles Island

What percent of the world’s affluent live in Brazil?live in Brazil?

1 ~ 0 5%1. ~ 0.5%2. ~ 1.4%3 4 3%3. ~ 4.3%

Capgemini Merrill Lynch World Wealth Report 2011

What percent of the world’s affluent live in the United States?live in the United States?

1 ~ 31%1. ~ 31%2. ~ 43%3 51%3. ~ 51%

Capgemini Merrill Lynch World Wealth Report 2011

# of HNWIs (in thousands)

HNWI Growth % 2009 - 2010

USA 3 104 8 3%USA 3,104 8.3%Japan 1,739 5.4%German 924 7.2%China 535 12.0%UK 454 1.4%France 396 3.4%France 396 3.4%Canada 282 12.3%Switzerland 243 9.7%A t li 193 11 1%Australia 193 11.1%Italy 170 -4.7%Brazil 155 5.9%India 153 20.8%

Capgemini Merrill Lynch World Wealth Report 2011

USA 21%Japan 16%Italy 8%Owners of Italy 8%Germany 7%UK 7%France 6%

Owners of wealth above USD 100,000 France 6%

China 6%Spain 3%

,by country of

residenceCanada 3%Australia 3%Brazil 2%Brazil 2%Taiwan 1%Korea 1%

h l d

Credit Suisse

Netherlands 1%ROW 13%

L i A iLatin America Ultra High Net Worth Measured by Population

Brazil 4,725Mexico 2,900A ti 1 050Argentina 1,050Columbia 900Peru 775Chile 750Venezuela 500Guatemala 310Guatemala 310Ecuador 310Dominican Republic 225

Wealth-X

Conspicuous Consumption ContinuumConspicuous Consumption Continuum

Old money New money

Conspicuous

Non- Conspicuous

The Least Established Segments Spend the Most on Luxury by Population

Aspirational Mass Market

Rising Middle Class New Money Old Money Beyond

MoneySegment sizeSegment size in 6* major

markets115 m HH 25 m HH 6 m HH 1 m HH .6 m HH

Luxury SpendingSpending

2010 (€ billions)

45-50 35-40 55-60 10 5-10

Boston Consulting Group

*Traditional categories; Brazil, China, Europe, Japan, Russia, United States

Newcomers by 2025 Dropouts by 2025Bangkok Athens

The World

Bangkok AthensBeijing BarcelonaChengdu Denver

The World Moves West

Chonguing DetroitDelhi HamburgDoha Lille

World’s Top 50 cities, ranked by GDP -

Foshan MelbourneGuangzhou Minneapolis-St. PaulHangzhou Munichby GDP

changes by 2025

Hangzhou MunichMumbai NagoyaNanjing OsloShenyang Rhein-MainShenzhen Rio de JaneiroTianjin Stuttgart

McKinsey

Tianjin StuttgartWuhan TapeiXi'an Vienna

Th Gl b l M k f L i Cl €1 T illi *The Global Market for Luxury is Close to €1 Trillion*

Travel and hotels 270Luxury cars 250Watches and jewelry 100Technology 100Technology 100Fashion and clothing 50Leather goods & accessories 50accessories 50Alcohol and food 50Furniture and décor 40Cosmetics and fragrances 30Other (for example, spas and clubs) 20

Boston Consulting Group analysis from Ipsos Research

*Global estimates were based on an extrapolation of data from 7 countries that represent 75% of the global market for luxury.

Americans put less value on luxury

Europe 37%

European markets constitute 37% of luxury goods demand

Europe 37%Americas 30%Japan 11%Greater China 11%Other Asia 6%ROW 5%ROW 5%

* Luxury market as defined by Altagamma: women's wear + menswear + leather goods + shoes +

Bernstein Analysis – Altagamma; Luxury market as defined by Altagamma

* Luxury market as defined by Altagamma: women s wear + menswear + leather goods + shoes + watches & jewelry + perfume & cosmetics 2010e

Americans put less value on luxuryAspirational Accessible

Elitist Luxury LuxuryAmericas 3% 16% 80%Europe 12% 41% 46%pJapan 15% 37% 48%Asia Ex-Japan 14% 56% 30%pROW 11% 83% 6%Brands by category Hermes LV Burberry

BV Fendi CoachBV Fendi CoachChanel Gucci Ralph Lauren

Prada Tommy Hilfiger

Altagamma, Haver, Bernstein Analysis

Ferragamo Calvin Klein

In the wake of a crisis, luxury and status , ymatter less to the affluent.

Personal values have been recalibrated.

Understanding why luxury consumers shop online is crucial

Avoid sales-assistants 46%O li b i h t 23%Online bargain hunter 23%Time pressed 16%

Altagamma – Based on luxury consumer panel

Survivor: Versailles IslandSurvivor: Versailles Island

What percent of America’s affluent come from a middle class background?from a middle-class background?

1. ~38%2. ~52%2. 52%3. ~80%

Harrison Group

80% raised in a middle-class or less environment

Have been affluent for less than 20 years~61% still on the front lines of business70% of their children attended public school

Harrison Group

h f kShifts in Marketing

2000 2012Needing stuffNewS lf

Demanding experiencesNew and NowC itSelf

MassConformity

CommunityTribesCustomizationConformity

AwarenessCustomizationNeurological connectivity

Robin Lewis & Michael Dart “New Rules of Retail “ 2011

The evolution of defining yourself

You are what you eatYou are what you buy

You are what you value

Political Affiliation by gender & net worth

Males Females$800K -$1.49M

$1.5 -$5.9M $6.0M +

Democrat 23% 39% 32% 31% 19%

Republican 47% 34% 37% 44% 50%Republican 47% 34% 37% 44% 50%

Other 30% 27% 30% 25% 31%

American Affluence Research Center

Spending by Age of Head of Household

$50K

$40K

$30K

$20K$20K

$10K

$ 0K

< 25 25-34 35-44 45-54 55-64 65 +

Henry Dent “The Roaring 2000 Investor”

Age Breakdown of HNWI Population - 2010, by Region

HNWI tHNWI percent under 55

Asia Pacific ex-Japan 69%Middle East 56%Europe 45%Europe 45%Latin America 45%North America 32%

Capgemini Merrill Lynch World Wealth Report 2011

China

Where has all the money gone?

ChinaFaster growing larger economy, younger, new money

Middle East, India and BrazilYoung, new money

USA and JapanOlder mature market slow growthOlder mature market, slow growthUSA doesn’t value luxuryFinancial crisis may affect USA

EuropeValue luxury, must resolve financial crisis, slow growth

Survivor: Versailles IslandSurvivor: Versailles Island

The Middle East has the least number of affluentThe Middle-East has the least number of affluent women as a % of total. Latin America is next worse: tied with who?worse: tied with who?

1. United States2

37%31%2. Japan

3. Asia-Pacific (ex. Japan)4 Europe

31%24%18%4. Europe

5. Latin America

6 Middle East

18%18%14%6. Middle East 14%

Capgemini Merrill Lynch World Wealth Report 2011

Thank you

Chris Ramey561 876 8077561.876.8077cpr@affluentinsights.com

Christopher P. RameyCPRCPRamey

www.FloridaLuxuryCouncil.comwww.AffluentInsights.com

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Chris Ramey is America's foremost authority on marketing and selling to the affluent.

Consulting services – Ramey’s personal clients range from hotels, retailersand manufacturers to professional sports organizations and doctors. Heconsults with unique insights reflected by the breadth of his clientsconsults with unique insights reflected by the breadth of his clients.Regardless of the category, Ramey can help you increase your sales toluxury customers and affluent consumers.

Keynotes & seminars – Ramey is a professional speaker and member ofNational Speakers Association. His presentations are entertaining,educational and motivating, and he is routinely the highest rated speakerg, y g pat association and corporate events.

Christopher P. Ramey 561.876.8077 cpr@affluentinsights.com