First of the big spenders
From new boobs to fresh fashions to foreign holidays, some of us are starting to splash the cash again
Published 26/06/2010 | 05:00
After two years of gloom, it is the economic prediction to raise eyebrows -- and spirits. Ireland's unemployment rate may be well above the EU average, but the country is set to rebound dramatically next year, according to a report this week from Ernst & Young. Growth is set to be so strong -- at 2.8pc -- that Ireland will outperform all countries in the eurozone with the exception of Slovakia.
"The forecast provides further evidence that Ireland is finally turning a corner and provides reassurance that we are not experiencing a 'lost decade' of economic growth as many had feared," says Ernst & Young senior partner Mick McKerr.
The report has been partly influenced by increased spending habits of Irish consumers as retail figures rise for the first time in years.
While a large portion of the population suffer from the effects of recession, many of those who have been largely unscathed have started to spend again. This renewed consumer confidence is reflected across a variety of fields. The following demonstrate how the cash is being splashed once more.
After a tough 2009, the country's leading department store, Brown Thomas, is experiencing a significant upswing in business. "We haven't had to discount this year at all, unlike last year," says managing director Stephen Sealey.
"The tipping point was the Budget last December -- there was something of a collective 'phew' afterwards. There's definitely a feeling out there that people who have some cash in their pockets are sick of the negativity and want to spend again. I truly believe that the Irish don't like to wear the hairshirt for very long."
Sealey is especially heartened with the ongoing summer sale. "Inventory is flying out the door," he says. "It's going to be the shortest sale on record. And the autumn/winter lines we have brought in are also doing very well."
Sealey notes that customers are favouring understated purchases above flashy ones. "Something like a Mulberry handbag is a beautiful piece of craftsmanship that doesn't go out of fashion. It's the sort of purchase that women who don't like to look showy are making."
Given the timing, the opening of BT's fine jewellery hall in 2008 caused surprise. "It's been doing fine," Sealey says. "Tiffany has become the second biggest brand in terms of revenue (after Louis Vuitton) and there's strong demand for watches -- Panerai is doing very well at the moment." The entry level price for this brand is €4,050.
Bronagh O'Sullivan opened the Bow & Pearl boutique in Ranelagh, Dublin, earlier this year and business is brisk. "People are definitely spending again," she says. "I wouldn't have dreamed of starting this business last year. Even those with money were petrified of spending it. But they are interested in value and I've been very careful with the price point. I'm getting a lot of repeat custom."
For one of the country's top up-and-coming designers, Heidi Higgins, there's a definite sense that her industry is over the tough times. "I opened my first boutique (in her native Portlaoise) three months ago and it's doing even better than I imagined. I sell my dresses for €295 and that's a price that women seem happy to spend on something that's going to be different to the norm and Irish-designed. I'm optimistic about the future because the fear of spending seems to have gone."
Fashion agent and blogger Nicky Harris is glad to see the back of such hackneyed terms as 'recession chic'. "Last year was all about shopping as cheaply as possible, even if the clothes were crap and fell apart," she says.
"Now, women are looking for value and that might mean spending a bit more for something that is beautifully made and will last longer. I don't think we're going back to the days where people spent a fortune and never wore what they bought -- they're more judicious now."
Cosmetic specialists The Hospital Group says business is strong this year. "There has been so much demand we have wondered if there was a recession at all," says managing director Aisling Holly. "Women -- and many men -- simply won't compromise on their looks and they will find the money if they want to have treatment done."
It is not uncommon for patients to spent €7,000 in one go with liposculpture and breast augmentation remaining popular. In recent months, the clinic has performed labiaplasty -- or vaginal rejuvenation -- on eight Irish women.
Demand for botox has increased too. "We have had several men over 40 coming in for botox," Holly says. "In some cases, they have lost their jobs and they find themselves in the marketplace competing with much younger guys. Botox makes them feel better about themselves and that's important because modern society is so obsessed with how people look."
Big money is being spent on cosmetic dentistry too. Dr Edmond O'Flaherty of Dublin's Seapoint Clinic has noticed a rising demand. "People are spending anywhere up to €30,000 on a complete smile make-over. It's an investment that can transform their lives."
Business at Seapoint is up by 30pc this year. "January 2009 was very quiet, but January 2010 was as good as ever," O'Flaherty says. "I think people were reluctant to spend money last year, but that's definitely changing now and we're seeing more demand for whitening treatments, veneers and implants."
O'Flaherty is bullish about the future. Opened just three years ago, he says the multi-practice clinic is set for expansion. "We are going to double the floor space and put in recovery suites for people who have extensive surgery. Consumer confidence has come back. There's no doubt about that."
New car sales for 2010 took just five months to exceed those for the whole of last year, with 57,900 cars sold by end of May. Car sales jumped up 70pc in May 2010 compared with the same month last year. Total sales are projected to exceed 80,000 by year end.
"Last year, people didn't want to be seen driving a brand-new car," says BMW's marketing director Michael Nugent. "They might have had the money, but it was frowned upon. That attitude has changed now, because I think there's far less panic about the economy, and also because there's much more value in the market.
"I think people might be less willing to choose a statement car than before. The new X1 is doing well for us, whereas had the X6 or the second generation Z4 been released during the boom years, they probably would have done very well here. They will be snapped up in emerging economies like China, but in Ireland more understated cars like the new 5-Series are appealling more."
Meanwhile, Nissan Ireland has reported that 500 people are on the waiting list for the new generation Qashqai and there is significant interest in the forthcoming marque, Juke.
Performance car sales have picked up slightly on last year, although 'Car Buyer's Guide', shows far fewer €200,000-plus cars than 2007. Nevertheless, Audi's €3m showroom in Ballsbridge, Dublin, opened in February, proudly displays the just released R8 Spyder: starting price €229,560.
Niall Rochford, general manager of the five-star Ashford Castle, says visitor numbers are up significantly on last year. "We have been pleasantly surprised and we have also seen the domestic market pick up too," he says.
"People are spending money again, but they are looking for added value. I think a downturn is a time in which service providers should give more to the consumer.
"We're holding weddings in the high season here, which wouldn't have happened last year at all. It's definitely a sign that for a chunk of the population things are going fine and their confidence has returned, but you have to remember that for many people times are still very tough."
Asheesh Dewan runs six Indian restaurants in Dublin, including the flagship Jaipur on South Great George's Street, and believes those businesses that have ridden out the recession are beginning to reap the rewards.
"It's been a tough time, let's not kid ourselves otherwise," he says. "But since April, I've noticed that business has really picked up for us. People are out socialising a lot more. There's a sense that they have kept their heads down long enough and are starting to enjoy themselves again."