Cushman & Wakefield’s study reveals a remarkable expansion of luxury brands in Europe, with a return to physical boutiques and increased investment in commercial real estate. This trend is accompanied by rising rents, reinforcing Paris as the world’s luxury capital, as brands seek to diversify the customer experience to attract an international clientele.
The luxury goods industry is undergoing an unprecedented transformation. It is marked by a renewed interest in physical boutiques and an increased investment strategy in commercial real estate.
This is highlighted by Cushman & Wakefield, the world’s leading professional real estate firm, in its comprehensive report on luxury retail in Europe. The study, entitled “European Luxury Retail”, provides an overview of current trends and key market developments.
With the phenomenon of normalizing luxury demand, the Houses are betting on ever-larger physical stores, enabling them to showcase a broader offer and foster a more immersive shopping experience, especially in the most prestigious locations.
The year 2023 has thus seen a proliferation of luxury boutique openings across Europe. Cushman & Wakefield reports that 107 new stores have opened in twenty prestigious thoroughfares, covering sixteen cities in twelve European countries.
Around 60% of these openings are in the apparel and accessories sectors, while 20% are dedicated to watches and jewelry, with the remainder including shoes, eyewear and other luxury goods.
Dominance of luxury conglomerates
A third of new openings are attributed to the three luxury giants – LVMH (9%), Kering (11%) and Richemont (13%). France, Italy and the UK accounted for half of these new stores, underlining the importance of these markets for the major brands.
The remaining two-thirds involve some sixty brands, including Ralph Lauren, Burberry, Stone Island, Moncler, Tod’s, Swatch, OTB Group labels, Roberto Cavalli and Ferragamo. One third of their stores are located in these same three destinations, while the remaining two thirds are in nine other countries.
In addition, new store openings continue this year. “LVMH has a number of stores scheduled to open on key luxury streets in 2024, notably for its Louis Vuitton, Tiffany, Dior and Fendi brands,” the study anticipates.
“Of the 20 streets analyzed, 16 have vacancy rates below 5%, seven of which no longer have a vacant location”.
Rising rents
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