London is the epitome of a global city. People come from all over the world to work and play in a metropolis whose history, location, and regulation make it an attractive destination for personal and corporate wealth. Growth in the banking and financial services sectors over the last two decades in the City of London has been phenomenal: London has over 480 overseas banks, more than any other city in the world, and more US dollars are traded in London than New York. And, for people in front-room positions in the industry, fat bonuses became the rule rather than the exception. In 2006 alone, average pay in The City rose 26% in comparison to only a 4.5% general rise in wages.
Big bonuses at the top in London's largest industry, an honour still held by banking and finance, have fuelled a pricing boom in everything from property to cocktails, making London the most expensive city in the world in 2008, according to the latest UBS Survey. Carol moved from New York to London quite a few years ago to advance her career in finance and has managed to beat the statistics in an industry with a massive gender pay gap that is only magnified at bonus time: the average bonus for a man in the City is 80% higher than for a woman.
But Carol, whom I met on Saturday to go shopping, doesn't let that, or the downturn which has brought an estimated 70,000 layoffs in the financial industry in London alone, stop her. She took me to a Boutique Sample Sale in London’s trendy Shoreditch neighbourhood. She first started shopping sample sales when she lived in New York. Now in the UK, and even though there isn’t quite the same culture around getting a ‘good deal’ as there was on the other side of the Atlantic, she hasn’t given up the habit. When she gets an email telling her Paul and Joe will be on the rail, she tries to get there early.
In her mid-thirties and without children, Carol, by her own account over a cup of coffee, lives a very comfortable life and is confident she’ll be getting a bonus again this year. So has anything changed for her in the economic downturn? London definitely had a tireless ‘spend-spend’ mentality that perhaps has rubbed off on her. She remembers when Chloe bags seemed as common as Nike trainers, and there seemed to be ‘must-have’ items every few months. While Carol tries to avoid fads, she believes her appearance is important and looking the part has helped bring her success, so she 'invests' in the right look. Nevertheless, 2009 has flown by and there have been very few- if any- whimsical indulgences. In fact, she just hasn’t experienced that ‘must-have’ feeling. It’s not just about shopping either. She’s noticed a change in the sentiment around spending more generally.
Her friends are socialising more at home and over lunch at a gastropub rather than meeting at the latest bar or restaurant. After all, the location is secondary when it comes to catching up with friends and she, at least, doesn’t particularly miss cocktails at Hakkasan. That’s important given the uncertainty around income for some of her nearest and dearest. One of her friends who works in private equity has already lost her job and is probably heading to Singapore, the only place she’s had an offer, in a month’s time.
Her goal today is to only buy clothes that she can wear to work- classic suits, nice tops- that kind of thing. We arrive at the sample sale. There is no line out the door, no cover charge, and none of that frenzied tone I had imagined a sample sale would inspire. Carol says it’s still worth coming early because there is no line to try things on. Gone are the days of grabbing what looks good and worrying about the fit later. There are racks of Paul & Joe, Acne, and Missoni amongst others, and none were left un-scrutinised. But about an hour and a half later when we exit clutching our finds, Carol hasn’t faltered from her plan very much and walks away with exactly what she came looking for… plus a few cosmetics as well.
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