Morgan Stanley Says Adults Living With Parents are Driving the Luxury Boom

Morgan Stanley Says Adults Living With Parents are Driving the Luxury Boom

Morgan Stanley Says Adults Living With Parents are Driving the Luxury Boom
Morgan Stanley Says Adults Living With Parents are Driving the Luxury Boom
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Retail Bum

Retail Bum

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A record number of adults living with their parents are driving demand for luxury products in the U.S. and the U.K.

Morgan Stanley’s research indicates that demand for luxury handbags, watches, and jewelry has been exceptionally high, with almost half of young U.S. adults in the 18 to 29-year-old age bracket still living with their parents, the highest observed level since the 1940s. Meanwhile, in the U.K., 42% of adults under age 34 are living with their parents, up from 35% observed in 1999.

“When young adults free up their budget for daily necessities (e.g., rent and grocery), they simply have more disposable income to be allocated to discretionary spending,” Morgan Stanley’s analysts said.

"We see it as fundamentally positive for the industry."

Demand for high-end timepieces has been particularly strong, with American consumers rediscovering their love for mechanical timepieces. For example, Richemont, the parent company of Cartier and watch brands Vacheron Constantin and IWC, saw its sales in North American increase by 22% in the first half of 2022. And in Europe, the company recorded even higher growth, with U.S. tourists traveling overseas to take advantage of a strong dollar.

The trend is unlikely to abate sometime soon as home prices remain high and more people are staying in college for longer and getting married later. Moreover, even though many of the stay-with-parents adults may be saving to buy a house, they are seemingly taking a live-now approach to purchasing luxury goods.

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