Rupal Patel took a break from her career as a patent lawyer in Chicago to enroll in an MBA program with a luxury specialization this fall, trading in the Windy City for the sparkling shores of the French Riviera. A student at the International University of Monaco's business school in Monte Carlo, she is spending the year taking classes with titles such as "Luxury Consumer Behavior" and "Managing Luxury Brands," and is planning on a career in anti-counterfeiting.
Despite the hit the economy is taking on the luxury industry, Patel is optimistic her degree will give her an edge in the job market when she graduates, she says.
"I think being focused and having a specialization, especially in luxury, makes a person more marketable in this economic climate," Patel says. "The ultra-wealthy will always buy luxury goods, regardless of the fluctuations in the economy, so that kind of gives us some hope."
Patel is one of a growing number of students who, despite the uncertain times, are setting their sights on a career in the luxury sector. In the past decade or so, more and more schools, many based in Europe, have started to offer MBA degrees in luxury-brand management. The programs, which give students the chance to specialize in sectors such as fragrance and cosmetics and wine and spirits, have become increasingly popular as top luxury brands have seen double-digit increases in profits in recent years.
But with sales of big-ticket items such as Champagne, designer handbags, and watches expected to slide this year, the outlook is not quite as rosy. Analysts at Bain & Co. said in a recent report that global luxury sales could slide by as much as 7% in 2009, while analysts at UBS are predicting a 5% revenue decline. Despite these gloomy forecasts, applications to luxury MBA programs are on the upswing, with students betting the luxury industry will bounce back, according to a number of schools that specialize in the area."Spending Fatigue"
Indeed, the cyclical nature of the luxury markets makes it an ideal time for students to enroll in a luxury MBA program, says Milton Pedraza, chief executive of New York research firm the Luxury Institute. Luxury-goods companies tend to outperform when the economy is strong but do significantly worse than mainstream ones when the economy is down and unemployment is low.
"There is a lot of luxury fatigue on the part of consumers at all levels, and I think this spending fatigue will continue through the next few quarters," he says. "But because luxury is cyclical, it's a good time to get into a luxury MBA program. You'll be spending your time learning in what is a severe downturn, and you'll really understand the rough side of the industry.
At Essec Business School in France, which has run an MBA program in International Luxury Brand Management since 1995, applications have doubled, to about 90, since last year, says Simon Nyeck, the program's academic director. The 11-month program, which costs €28,000, currently has about 40 students, representing 15 to 20 nationalities.
"I was a little surprised, to tell you the truth," Nyeck says of the strong application numbers. "I think most applicants are betting on the fact that by the time they graduate, things are going to be O.K."Rising Enrollment
Applications have also doubled this fall at the International University of Monaco's Monaco Business School, which started a master's in luxury goods and services and an MBA with a specialization in luxury management several years ago. There are 38 students in the master's program and about 12 MBA students concentrating in luxury. Sandrine Ricard, the associate dean, says the school started the programs in part because a growing number of companies were demanding managers with more specialized skills and understanding of the luxury market.