Luxury Briefing.

DESPITE the fact that so much of the luxury industry is manufactured for and marketed to women, the industry itself is still largely determined by men: run by men, strategised by men, designed by men. Businesses are waking up slowly to what will be the most important sea-change of the century: the continued reversal of power from men to women. Who knows? By the start of 2009 the leader of the free world may even be a woman.The future of the world economy will increasingly be in female hands and will be based on what The Economist calls ‘womenomics’. In luxury, wealth management and wealth creation, make no mistake, women are important players.A record number of women directors now sit on the boards of the top FTSE-100 companies. A study from the performance consultancy Catalyst found that companies with more women in senior management earn a higher return on equity.Meanwhile, the previously male-dominated world of hedge funds is being challenged by increasing numbers of successful, female-run funds. According to a recent report by Hedge Fund Research, hedge funds run by women have outpaced the market as a whole. The HFRX Diversity Index shows that, since 2003, female fund managers have returned 11.26% annually net of fees, compared to the global average of 7.76% in the same period.A prime example is Susan Shaffer Solovay, who runs Pomegranate Capital Management, a ‘fund of funds’ that invests solely in hedge funds run by women. Shaffer Solovay has identified over 300 women-run funds which, between them, manage $55bn in capital. The HFRX report also cited funds such as Green Cay Asset Management, run by Jane Siebels, Nancy Havens’ Havens Advisors, Tracy Maitland’s Advent Capital Management, Karen Finerman’s Metropolitan Capital Advisors and Jamie Zimmerman’s Litespeed Partners.According to a report by the Centre for Economic Business Research, by 2020 53% of millionaires will be female, with Datamonitor research indicating that the gap between male and female wealth is narrowing. In 1998 the average female millionaire was worth £1.28m, less than half the average male millionaire’s worth of £2.71m. In 2006, however, the gap closed, with women holding over two-thirds of the wealth of their male millionaire counterparts (£1.97m compared to men’s £2.96m average).This new increased economic power has also been called ‘feminocracy’, perhaps best represented by more female-oriented marketing campaigns such as De Beers’ ‘Raise Your Right Hand’, telling women they don’t need a man to buy them diamonds.Higher-paid careers and later marriage and child-rearing mean that women have more to spend in their twenties and thirties, giving rise to the ‘indulgence decade’. Much of their spending is focused on their own pleasure and wellbeing, creating a booming market for luxury and indulgence purchases, especially in the apparel and leisure sectors.Lucy Hutchings of the online women’s community MarmaLADYa, comments: “There are all these women who have more personal cash than ever to spend because they are running their own businesses or pursuing careers that would have been closed to them in times when child care was less available, and are still the decision-makers when it comes to spending family money.”But it’s not just these new mistresses of the universe who are making a difference. With women in general making 80% of family consumer-buying decisions, including those for traditionally male products such a cars and electronics, they are seriously worth wooing. According to Daniel Pink, author of A Whole New Mind: “They control huge amounts of money and are often the chief decision makers for a variety of goods and services. Any business that does a good job of talking with women customers, listening to women customers and serving their needs is going to do just fine.”But let’s be clear: womenomics is not about ‘thinking pink’, about feminising business practice or adding frills to existing structures. It’s about a wholly new, female – as opposed to feminine – way of thinking and doing. And it’s more in step with a 21st-century way of doing business: more right-brained, intuitive, less process-driven and able to deliver concept, emotion and experience. Time to get more female in your strategy.

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