Spending style of the rich and famous suffer

It's a common piece of conventional wisdom that the luxury market is insulated from bear markets and cyclical slowdowns. But since the onset of the subprime meltdown and the credit crisis, that bulletproof high-end market is starting to look a little wounded, leaving little doubt that wealthy have started to shift their spending patterns.All of the numbers point to the fact that that the luxury market is cyclical, admitted Milton Pedraza, CEO of the Luxury Institute, a New York-based independent ratings and research organization. When the unemployment rate goes up, luxury spending typically goes down, but this drop in spending has been much deeper than usual, he said.

“This is the first time in recent memory that wealthy consumers have seen the value of their investment portfolio drop 35%, real estate is down 10% to 20%, and revenue from their businesses is down -- not to mention the recent devaluation of the dollar against the euro,” Pedraza said. “It’s a triple whammy effect that’s not previously been seen by wealthy consumers.”

That perfect storm of financial fallout has chipped away at the confidence of wealthy American consumers. 

Even though the disposable income of the mega-rich has not been directly affected by the downturn, America's millionaires and billionaires are still changing their spending patterns.

The consumers who can afford to spend money on luxury brand items, do not necessarily want other people to know they're doing it.

“Right now, the less label, the better”