CEO Letter | ‘The rich are different; they have more money’*

I have a new vantage point this week. Usually when I write, I stare out through my office window at the Houses of Parliament and the slow-flowing, timeless Thames, and my thoughts necessarily turn to Brexit and to the other legislative issues facing our sector.

But right now I’m holed up at one of the achingly chic beach-side bars that string along the waterfront in Juan Les Pins, washing white sand from my toes in the limpid waters of the Med, sipping an ice-cold Kir and staring out into the bay at an absolute glut of Superyachts – so many, it must keep the people who control the sea traffic very busy indeed. Dwarfing the common or garden sixty or seventy metre superyachts around it – as a rule of thumb, a superyacht costs a million pounds a metre, so these are hardly small-fry – is Eclipse, Roman Abramovich’s extraordinary 162.5 metre yacht. It’s at anchor conveniently close to the Abramovich’s holiday villa, Le château de la Croë, on Cap D’Antibe, and so luxurious, it has room for three helicopters and its swimming pool can be raised to transform the area into a dance floor for marvellous parties. In just three days I’ve turned into a superyacht geek, making notes as new craft hove into view  – Unfurled, a Bauhaus-inspired sailing yacht and winner of the 2016 World Superyacht Awards, was a good spot yesterday –  and looking them up on Boat International, the authority on superyachting and the life that goes with it, is one of Walpole’s newest members, and remains the only media company to have had access to the inside of Eclipse.

Superyacht ownership is the single best identifier of the world’s ultra-ultra high net worths – after all, if, like Eddie Jordan, you fancy a Sunseeker 155 as a holiday home, you’ll need about £32 million, and that’s without the annual upkeep of 10% of the yacht purchase price. Eclipse is said to have cost £1.5 billion to build, but then Abramovich has exceptionally deep pockets. This is not, on the whole, inherited wealth: 95% of superyacht owners have made their own fortunes – think of David and Simon Reuben, whose fortune is built in property and data and who own Arena Racing, Sir James Dyson (household tech), Ernesto and Kirsty Bertarelli (pharmaceuticals), or the Graffs (diamonds). The world’s super rich is a nomadic community – why get rained on when your private jet is on standby to whisk you to sunnier climes– St Barts for New Year, Davos in late January, Megeve at Easter, a prolonged spell in London from where you run your global business empire, then plenty of pootling up and down the Med over the summer, from Palma to Porto Cervo and beyond.

Britain has the highest proportion of superyacht owners: London is the hub of global wealth, perfectly located for doing business with the Far East in the morning and the Americas in the afternoon, for its geo-political and economic stability, for its excellent private schools, its culture and heritage, its world beating luxury retail scene – as we highlighted in our report with CBRE on Luxury & Location – and for ease of access to the rest of the world. It seems extraordinary to say it, particularly when looking at their vast boats, but it’s also an intensely private community, and one that’s notoriously difficult to market to – after all, these are customers who can make your entire quarter in a single transaction, if only you get it right – but is the conversation different with someone for whom money is no object? *To quote F.Scott Fitzgerald, who also liked to holiday in Juan Les Pins, ‘Let me tell you about the very rich. They are different from you and me.

What we talk about when we talk about Brexit
Walpole joined fellow ECCIA members, Meisterkreis, Comite Colbert, Altagamma and Circulo Fortuny, and CEO’s from luxury brands across Europe in Berlin at the end of last month for the European Excellence Summit, organised by Clemens Plantz of Meisterkreis [more on this story here (include link for story on the summit which Charlotte has written)]. Whilst I can’t say I relish the inevitable conversations about Brexit, I always find meetings with our European counterparts immensely encouraging – the sense of unity and collaboration that was the founding principle of ECCIA seven years ago is strengthened rather than diminished by Brexit, and continuing to build on these relationships is a priority for Walpole, retaining as it does a spearhead into Europe and a seat at the table for legislative issues in the EU that will continue to affect luxury brands in Britain. Walpole took a very strong delegation of senior leaders from within the membership –  Johnstons of Elgin, Wedgwood, Backes and Strauss, Richemont, Chapel Down, Richard Brendon, Church’s, Harrods, DAKS – which underscored our continued commitment to our European relationships. It’s interesting to consider that the founding of ECCIA – the European Creative and Cultural Industries Alliance – by the luxury associations around Europe, enabled our sector to gain recognition in the EU, something which I would dearly like to push for in our own parliament. The Summit also attracted a strong contingent of senior EU representatives, including Commissioner Elżbieta Bieńkowska and Dr Christian Elher – both of who are strong supporters of the European luxury businesses. Their speeches highlighted the release of half a billion euros from the structural funds for investment into the European luxury sector. That these funds, so successfully lobbied for during Walpole Chairman Michael Ward’s tenure as ECCIA President, will no longer be available for the UK in the years to come, goes hard, yet the overwhelming feeling from the Summit was of working together to further the shared interests of the sector. Business will prevail, despite a rather challenging political backdrop.

In addition to the European Excellence Summit we also organised for our delegation to meet with the British Ambassador to Germany, Sir Sebastian Wood KCMG and Andre Maeder, CEO of German department store group, KaDeWe. Very cheeringly, the appetite for British luxury goods is strong in Germany, and Mr Maeder would like to explore a showcase of British luxury goods in KaDeWe stores in 2018, with the support of the British Embassy.  Please see further details in a news piece below.

At home, it seems the election has facilitated a more prominent voice for business in the Brexit negotiations, which is to be greatly welcomed: the needs of the economy must be the single biggest priority in the talks, and whilst the election result has created more not less political uncertainty, it has at least created space for Chancellor Hammond to open a dialogue with business leaders. Walpole has been talking to the CBI to garner their support for the needs of British luxury during Brexit, sharing our view that as a sector worth £32.2 billion, with a regional manufacturing base and a strong export business, we are a hugely important sub-set of the business economy. We are  busy feeding information about the specific needs for our sector to the CBI and their newly formed  Business Task Force which meets on a weekly basis with David Davis and Greg Clark and is joined fortnightly by Chancellor Hammond. Our role at Walpole is to use every possible lever we have to protect the interests of our sector: our relationship with the CBI is one of those.

It’s all about the money
Counterfeiting is one of the five common issues Walpole works on with fellow ECCIA members – it costs the luxury sector billions in lost revenues every year and the link between counterfeiting and the funding of terrorism is well proven. Counterfeiting is not a modern phenomenon, of course: Walpole member The Royal Mint has been at the forefront of tackling counterfeiting for more than a thousand years, as well as being a crucial part of our everyday lives. Join Walpole for a special Meet the Members event where we go behind the scenes after dark at The Tower of London on 30th October; it promises to be enormous fun, as well as informative – what better place to learn whether it really is all about the money? For more details, please contact