RIGA - In Latvia luxury goods have come to symbolize not only wealth, but status and a way of life.
But as the country's economic situation continues to deteriorate, all that glitters is certainly not gold.
The market in luxury goods, like many others, has taken a nosedive as even the rich and privileged tighten their belts amid ongoing gloomy economic forecasts.
Uldis Zvirgzdins, who runs a mail order company for upmarket clothing and jewelry, said the market for high end luxury goods was relatively small in the Baltics and therefore particularly vulnerable to economic instability.
"If we talk about luxury goods being like some sort of representation of wealth and of good economic health then yes, we certainly feel it [the economic crisis]," he said.
Despite the downturn, a market still remains for exclusive luxury goods including fashion, furniture and cars.
According to Zvirgzdins, whose company specializes in one off items from local and international designers, people have changed their shopping habits but have not stopped buying.
He said the majority of clients were buying less, but unwilling to completely give up the luxury items they enjoyed and which were representative of their lifestyle.
In Latvia, Zvirgzdins said clothes are as much about keeping up appearances in terms of social standing, as they are about fashion and style.
"Fashion is something very important in Latvia. Even though of course people are experiencing these hard times, it is still important for people to look good 's this is the way people try to feel good about themselves," he said.
"Fashion is a very personal thing; it's about personal style and the way other people see youâ€¦ and we can say this very often is influenced by appearance," he said.
Liga Broka, board member of Modena Motors Group, official dealers of Alfa Romeo and Maserati throughout the Baltics, said luxury cars also represented a lifestyle choice.
"Firstly, it's lifestyle and the designâ€¦ It's for those who want to drive fast but also in comfort. It's not just a car to get from one place to another, it's something more," she said.
Among the ultimate in luxury vehicle, the Maserati and Alfa Romeo come with a price tag of between 18,000 and 100,000 euros.
According to Broka, luxury cars still had buying power even in times of economic downturn.
"We still do have these clients and even in these bad times there are high end clients and we still have these clients and they are not going to change their way of living and how they celebrate their everyday lifestyle. Definitely it's not going to change. It's not going to be as big as it once was previously, but it will still be all right," Broka said.
"If the client wants to invest in a Maserati, he is not going to buy anything less valuable; it means he already understands this brand and wants this special feeling when you drive it," she said.
The automobile industry in Latvia has been hard hit by the financial crunch, recording a drop of 80 percent compared to the same time last year.
Tough economic times meant people were increasingly choosing to buy cheaper compact class or second hand vehicles.
The auto industry has called on the government to reduce VAT on vehicles and registration costs.
The high cost of vehicle registration in Latvia means many car owners cross the border to Estonia and Lithuania, where the costs are lower.
Broka believes the government could do more to support recovery in the industry by reducing barriers to car ownership.
According to Broka, sales had dropped off in November last year, but it remained difficult to gauge how deep the recession had hurt the luxury vehicle industry.
"It wasn't just one day we noticed that no one was buying, it was more gradual," she said.
"It is a little hard to sayâ€¦ If we talk about the Maserati, it is a seasonal car. People buy it in summer. Most sales come in March and April, so we didn't realize last autumn if this crisis affects us or not and how deep," she said.
However, Broka said there remained opportunities for expansion and development in Latvia's luxury car market.
"The thing about Latvia is we haven't reached our maximum market and we can expand more, and anyway, crisis or not, people still buy these cars," she said.
Modena Motors Marketing Manager Inese Dabola said the company continued to adapt and develop effective marketing strategies to maximize success in the marketplace and capitalize on the stand out aspects of the product.
"Of course we collaborate with the factory in Italy and we make up different strategies to reach our target groups and it depends on model and what are our aims. In all such activity we use emotion that is associated with Italy. It's what you are, it's who you are; it's how you feel when you drive," Dabola said.
Broka expects the current downward trend to continue for another several months, but said future outlooks remained positive.
"Of course we are optimistic we are still in the businessâ€¦ and we have these marketing strategies to of course stay in this business [until] better times come again," she said.
"We have this privilege that we have importer rights on three brands 's the Fiat, the Alfa Romeo and the highest is the Maserati, so we believe that we can stand out in the tough times."