PRESS RELEASE

Luxury Consumers Are Indifferent to Rising Gas Prices and Threat of Bursting Housing Bubble
Luxury Consumption Index Climbs to 104.7 at end of 2Q2005, up 9.1 Points Since End of 2004

Stevens, PA August 29, 2005 — Luxury consumers feel significantly better off at the end of the second quarter 2005 than they did at the start of the new year. Continuing a positive upward trend in luxury consumer confidence through the first two quarters of 2005, Unity Marketing’s exclusive Luxury Consumption Index rose 9.1 points this year to reach 104.7 at the close of the second quarter 2005.

In a survey of 1,153 luxury consumers (average income $141.9k and age 42.6 years) conducted in association with Unity Marketing’s quarterly luxury consumer tracking study, 90 percent of respondents said their personal financial condition was better off or about the same now than three months previously. This compares to 85 percent who felt the same at the close of the first quarter.

“While luxury consumers continue to take a cautious stance relative to the country’s overall financial health, they personally believe they can weather most any economic storm,” said Pam Danziger, president of Unity Marketing and author of Let Them Eat Cake: Marketing Luxury to the Masses — as well as the Classes. “They continue to be active buyers in the three luxury sectors tracked — home, personal and experiential luxuries — and are not letting rising gas prices or the potential threat that the housing bubble will burst impact that purchasing behavior.”

Commenting on the rise in this quarter’s Luxury Consumption Index, Thomas Bodenberg, economic forecaster for Unity Marketing and former Conference Board executive says, “The increase in the Luxury Consumption Index is driven chiefly by two sets of behavior and expectations. First, an increasing number of panelists believe that the United States is about the same fiscally as it was three months ago, showing a drop in the percentage who see the economy negatively. Second, panelists find that their ‘steady as she goes’ view of the economy will NOT impact deleteriously their future spending patterns on luxury goods and services.

“Unity’s prediction for the luxury goods and services sector is positive through the rest of the year. The luxury consumers may well be retailers primary hope for salvation in what is shaping up to be an increasingly challenging holiday gift season,” Bodenberg continues. “While the price of petroleum and the long-expected bursting of the housing bubble may adversely impact other segments of the economy, little impact is foreseen in the demand for luxury goods and services. Unity’s results show convergence with recent data from The Conference Board and University of Michigan. Historically we have found that the luxury segment tends to ‘march to its own drummer.’”

Unity Marketing publishes its Luxury Tracking Study quarterly with the next due in September 2005. For more information, visit http://www.unitymarketingonline.com/reports2/luxury/luxury3.html or call Pam Danziger at 717-336-1600.

About Pam Danziger and Unity Marketing

Pamela N. Danziger is a nationally recognized expert specializing in consumer insights for luxury marketers, whether they sell luxury to the masses or the ‘classes.’ She is president of Unity Marketing, a marketing consulting firm she founded in 1992.

Advising such clients as Lenox, Cartier, Herend, Rémy Amerique, Spring Air, Sears, The World Gold Council, The Conference Board and American Express, Danziger taps consumer psychology to help clients navigate and master the changing luxury marketplace. Her latest book, Let Them Eat Cake: Marketing Luxury to the Masses—as well as the Classes, (Dearborn Trade Publishing, $27, hardcover) is in book stores now. She is the author of the recent book, Why People Buy Things They Don't Need: Understanding and Predicting Consumer Behavior (Chicago: Dearborn Trade Publishing, 2004).

She has appeared on CNN’s In the Money, NBC’s Today Show, CNBC, CNN International, CNNfn, CBS News Sunday Morning, Fox News’ Your World with Neil Cavuto, ABC News Now, NPR’s Marketplace and is frequently called upon by the Wall Street Journal, New York Times, American Demographics, Women’s Wear Daily, Forbes, USA Today, Associated Press, Los Angeles Times, Chicago Tribune for commentary and insight.

For media, Unity Marketing can make tables, charts and graphs available about the luxury market upon request.

Contact: Pam Danziger, 717-336-1600