Tuesday, March 30, 2010

The Ugg Boot Economy

The Australian economy is doing good. Really good. For a global economic crisis it seems that we crawled out of that one pretty fast. In the past when I have traveled to the UK the Australian Dollar was pretty mediocre. (1997) $1 = 20p. (2005/2009) $1= 40p at best. It made travel to the United Kingdom and Europe an extremely expensive luxury and most people would rather opt for a ticket to Indonesia/Thailand where you could get more bang for your buck.

When the Global Financial Crisis hit in 2008/9, I for one was very interested to see how the Australian Dollar would fare against much stronger economies in the fallout, and to date we are doing so well it is almost mind-boggling.

$1 = 61pence
$1 = 91c (US)

The Australian Dollar has risen about 3 times its worth over the course of one year. For travelers abound this is like winning the exchange rate lottery.

It does however bug me when I live in a country where the economy isn't doing as well as it used to. Back when the Australian Dollar was doing rubbish, people could move to London and work for a couple of years and send money back home which would amount to a generous cash deposit for a home loan. I really don't think that is a feasible possibility anymore. When the average young person makes about £20,000 (at a good end - the runner in my company makes £12,000 - he has to live with 5 strangers and share a room with another dude) and rent is comparable to prices back home. You can spend all your cash on bare-minimum living and have nothing left over to enjoy.

How did Australia achieve this monumental feat in economic turnaround??

UGG Boots.

Everywhere I go. UGG Boots. The UGG Boot stores here have red velvet ropes and black security guards outside to keep the numbers inside to a minimum. When I first witnessed this phenomenon I figured Madonna must be inside the store buying slippers - but no... just regular people.. buying UGG Boots.

UGG Boots are fucking expensive. roughly £250 for one pair. And that's just an average pair, not even a fancy pair. When you come across a gaggle of girls in the street 80% of them are wearing UGG Boots - not just woolly boots, but actual UGG boots. It's the label that matters. I'm sure if you are 15 years old and went to school in your M&S generic woolly boots you wouldn't have anyone to sit with at lunchtime. That is how much of a domination in footwear UGG have achieved over here.

Combine a generation of impressionable girls hell bent on conforming to the ideal of coolness through woolen footwear, and the astronomical price of what amounts to fluffy slippers, and you have an economic recovery point. Praise the Big Merino.


Anonymous said...

Isn't Ugg American-owned? I agree though - it's a pain in the arse that the pound is worth so little,
I wanted to take home a house deposit too!

Rach said...

it probably is. we dont own anything anymore.

arnotts biscuits/Uggs........ cant get rid of Pauline Hanson tho.

suze2000 said...

Latest news had Pauline heading over to the UK haha. You can have her. :)

I'm very excited about the exchange rate. It means that our holiday to Europe and the US next year is actually financially feasible. Which is exciting in itself.

If it's any consolation, I don't think it will last more than a year or so. I think this time next year, the exchange rate will be back down around 50p and 78c for an Aussie. I'm not sure it will fall any further though, as our economy is linked now to the Chinese, and they are going mad over there.