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In our era of inequality, luxury capitalism is thriving

While the British high street declines, Harrods, Selfridges and Harvey Nichols are turning over record profits, fuelled by a new kind of global consumer.

Five years ago, when I was 20, I got a temp job as a shop assistant at Harrods. Every day, toes aching from my cheap plastic shoes, I smoothed expensive fabrics on hangers and helped millionaires select lizard-skin handbags. During this period, gainful employment was still a novelty, and I was surrounded by luxurious items that cost more than my monthly wage. This proximity to wealth was in equal parts dazzling and radicalising. I hadn’t thought about myself as someone interested in politics, until I was presented with naked concentrations of money. How were customers so rich? Why were staff comfortable with these asymmetries? And would it be arrogant to assume that if I had so much, I could resist the compulsion to blow it all on something superfluous?

Harrods occupies the point on the Venn diagram of aspiration where multiple tastes converge: a place where, although the sun hasn’t set on the British empire and gold taps are still in fashion, the wealth now flows from the Far East and Gulf states. Capitalism has a way of adapting to change. The new class of millionaires that frequent the shop are engaged in the relentless acquisition of hard wealth while chasing the softer signals of cultural capital bestowed by Western luxury brands. In the fashion department where I worked (the only one in the UK that still sells fur), a millinery section of jewelled hijabs sat alongside Oscar de la Renta gowns befitting of the Queen Mother. Upstairs, the sixth floor was given over to a simulacra of boutique perfumers, each reminiscent of a distinct historic period; 18th-century France, art deco, imperial Russia.

Shoppers were sometimes referred to as “clients”, a label suggesting a mutually beneficial exchange. Choosing the right dress for a party or the correct wardrobe for a skiing trip wasn’t just shopping: it was a journey, in which particular assistants enjoyed playing a part. With their regular customers, shop assistants, who worked on commission, would take part in a momentary fantasy of spending money by proxy. Constant exposure to dizzying, egregious amounts of money (and the desire to have some of it) often made assistants identify more with their customers than their colleagues. Some saved up for the same handbags and accessories, and stayed in touch with regular shoppers over WhatsApp.

The items we sold weren’t beautiful exactly. They epitomised the smooth velocity of liquid capital: heavy embellishment, python skins, monogrammed leather. Women passing through my department gradually became indistinct from each other. They all had the same look of wealth, with ageless, perpetually moisturised skin. For them, the normal constraints of time and seasons didn’t apply. Our customers chased the sun around the world, we were told, and bought swimwear in winter. All year, a room of bikinis was spritzed with magnolia and fake sunshine beamed through ingenious lighting. The effect was disorientating – I felt jetlagged. One summer, I was seconded to sell fur coats in the sweltering August heat at a horse-jumping show. In the booth next to mine, attendees sipped cold lemonade and ate strawberries dipped in chocolate. Their particular version of luxury, I learned, was premised on the ability to shut out the world around you.

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Harrods was founded in 1832 by Charles Henry Harrod, a business owner who had become rich from selling tea and draperies. He opened two shops in east London before founding his eponymous store on Brompton Road in 1849, to capitalise on the popularity of the Great Exhibition in nearby Hyde Park. The shop’s motto is “Omnia Omnibus Ubique”, or “all things for all people, everywhere” – a nod to its partial democratisation of luxury. Anyone can walk into the store and buy a Challah roll from the bakery for little more than a pound – or a handbag for £17,000.

In 1985 the vast, domed, red-brick store, which is still located between Hyde Park and Kensington, was acquired by the Egyptian businessman Mohamed al-Fayed, who also owns the Ritz hotel in Paris. In 1994 he became notorious for paying Conservative MPs to ask questions on his behalf in parliament. Al-Fayed installed a kitsch golden memorial to his son, Dodi Fayed, who died in a car crash with Princess Diana at the close of the last century, at the base of the shop’s Egyptian Escalators (plans to remove it were announced in 2018).

In 2010, al-Fayed sold the shop for £1.5bn to the sovereign wealth fund of the state of Qatar. “This is not Marks & Spencer or Sainsbury’s…” he said at the time. “There is only one Mecca.”

By the early 20th century, most small towns in the UK had a department store. In the North and the Midlands, Grimsby and Wolverhampton, these storied destinations were an emblem of faded glamour – of visits to see Santa, window shopping for toys, and cake in the tea rooms. Their displays marked the changing seasons, and events like the switching on of the Christmas lights embedded department stores within the social fabric of towns and cities. Today, Britain’s department stores are in trouble. Their closure tells the story of the UK’s fast-declining social infrastructure. The high street is an economic bellwether: as Britain’s post-crash economy has stagnated, household retailers have given way to payday loan shops and pawn brokers. The effect isn’t just physical, but emotional: closures sever continuity and chip away at a residual sense of place.


A people’s palace: Le Bon Marche department store in Paris during the 19th century. Credit: Universal History Archive/Universal Images Group via Getty Images

In 2018 the British high street endured its worst Christmas since the 2008 global financial crisis. This is partly due to the growth of online retailers; it’s now often easier and cheaper to buy a present on Amazon than on London’s Oxford Street. Nonetheless, since the crash there has been an almost unprecedented period of stagnation in living standards. People have less disposable income. Household names such as House of Fraser, which made an operating loss of £54.6m in 2018-19, and Debenhams, which has issued four profit warnings in the past two years and plans to close 50 stores, are teetering on the brink of collapse.

Today, walking through Marks & Spencer’s sparsely populated clothing department, with its fluorescent lighting and polyester fabrics, brings to mind Philip Larkin’s elegiac 1961 poem “The Large Cool Store”, based on a branch of M&S: “The large cool store selling cheap clothes/Set out in simple sizes plainly/ Knitwear, Summer Casuals, Hose/In Browns and greys, maroons and navy.”

And yet when you enter Harrods or Harvey Nichols, it’s possible to forget that the financial crisis ever happened. There’s an outdated sense of opulence inscribed in the food courts and fashion departments of luxury department stores – they capture a time before 2008, before the Labour Party considered billionaires a sign of policy failure, when private jets were still a symbol of status rather than ecological nihilism. Despite Britain’s shuttered retail landscape, the fortunes of luxury department stores are soaring. Selfridges, which was opened in 1909, is undergoing an elegant £300m rebuilding by the architect David Chipperfield and has achieved 13 consecutive years of record sales. Harvey Nichols, the Victorian department store based in Knightsbridge, posted a nine per cent increase in revenues in 2018-19. Harrods operates 14 airport concessions, a private jet charter and a real-estate business on London’s Park Lane. Its operating profits were £202m in 2018-19.

The market for luxury goods is premised on inequality. As Giorgio Riello, a professor of history at the University of Warwick observes, luxury – or at least public discussion of it – disappears as societies progress towards greater equality. When comfort is commonplace, we fixate less on extremes. The converse also holds: societies in the second decade of the 21st century, where the richest 1 per cent own half of the world’s wealth, “lead luxury to the fore”, Riello writes. (In 2018, the global market for luxury goods was valued at $1.2trn.) Harrods is unequivocal about its targeting of the elite. “Our target audience is the top 0.1 per cent of the world’s wealth,” its managing director Michael Ward told the Financial Times in 2017. “The rich are getting richer and they have done for the past ten years.” The potent symbolism of luxury shopping wasn’t lost on the French gilets jaunes protesters in 2019, who deliberately targeted the Champs-Élysées, smashing glass window panes and raiding stores. They scrawled “Thanks for the cashmere” and “Luxury for everyone” on broken shopfronts.

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The history of department stores is inseparable from conspicuous consumption and the growth of a leisurely, moneyed class. They emerged in the late 18th century and became a refuge from the 19th-century metropolis and a microcosm of contemporary capitalism. Stores offered a new, socially acceptable space outside the home for women to linger unchaperoned. Away from the dirty, noisy, crime-ridden streets of 19th-century cities, department stores were an early form of public (albeit commercial) space. Émile Zola based his novel Au Bonheur des Dames (1883) around Le Bon Marché in Paris, though he recognised that these “cathedrals of consumption” were also cages, which offered the illusion of freedom while monetising female desire.

Their growth was tied to the acceptance of a particular kind of vice: shopping. Until the 17th century, governments had attempted to restrain luxury and extravagance with sumptuary laws that limited consumption. As capitalist economies developed, people debated how to encourage economic growth. In 1705, the political economist Bernard Mandeville published a long poem called “The Fable of the Bees: Or Private Vices, Publick Benefits”. At the heart of Mandeville’s satirical, capitalist screed was a compelling idea: the economy would be improved not by slashing consumption, but by encouraging people – particularly elites – to spend on extravagances. Mandeville’s book contained the seed of Gordon Gekko’s remark some 250 years later in the film Wall Street: “Greed is good.”

“Changing ideas of luxury and changes in capitalism are deeply related to each other,” Max Curtis, a doctoral researcher in politics at the University of Cambridge, tells me. Just as early-19th-century department stores marked the evolution of middle- and upper-class spending power, today the buoyancy of luxury capitalism points to another development. Since the grand department stores were founded in the heyday of British colonial power, the global economic map has been redrawn. Wealth is moving steadily eastwards; China is now the world’s largest purchaser of luxury goods. According to figures from Credit Suisse, China is home to more of the global top 10 per cent of earners than the US (and is second only to the US in its number of billionaires).

“Imbued with the confidence to spend, underpinned by a lifetime watching new skyscrapers rise in tandem with their family incomes, [young Chinese] consumers are eager to tap luxury as a means of social advancement,” gushed a 2019 McKinsey report on the subject. A convergence of newly minted spending power and zeal for extravagance has occasionally surreal results. In a store opening for the British fashion house Burberry in Shanghai, the British model Cara Delevigne “flew” over the catwalk like a modern Mary Poppins, holding a Burberry checked umbrella, against a backdrop of the stormy Shanghai skyline. Elsewhere, Selfridges, Harrods and Harvey Nichols have hired Mandarin-speaking staff and are active on WeChat, China’s largest social media network and mobile payments app.

As the high-street shops and struggling provincial centres that serve the rest of society are fast disappearing, these luxury shops are the service enclaves for the ultra-rich. Though London, in particular, has become a city of financial power, its wealth is concentrated in an elite private sphere. When I worked at Harrods, one regular shopper bought his girlfriend a dress and arrived to return it a few weeks later. She’d broken off their relationship; I consoled him while carefully unfolding the fabric to process a refund. Some weeks later he visited me again, ostensibly to shop – though, I imagine, also to chat. He had bought a new pair of cashmere trousers and asked where I’d recommend he get them tailored. I wasn’t sure: I’d never been to a tailor. Oh, of course not, he replied self-consciously, reminded suddenly of the stark gulf between us. In this economy, that gulf shows no sign of narrowing. 

Hettie O’Brien is assistant opinion editor of the Guardian and the New Statesman’s former online editor.

This article appears in the 13 December 2019 issue of the New Statesman, Christmas special