Luxury Retailers Expand Footprint After 2022 Bonanza
By Chava Gourarie September 26, 2023 6:27 pm
reprints
After an impressive pandemic rebound in 2022, luxury retail brands have been expanding their retail footprints, leasing a total 650,000 square feet of space during the 12 months ending June 30, according to a report from JLL (JLL).
Luxury retail sales hit $69.5 billion in 2022, edging past the $68.95 billion high in 2019 prior to the pandemic — and that’s fueled the retail expansion, per the report.
New York and Los Angeles continued to dominate the sector, accounting for more than half of all luxury retail leasing in the United States in the prior four quarters, while Sun Belt cities such as Miami, Atlanta and Las Vegas saw significant growth. Detroit emerged as a surprise winner as well.
LVMH — parent brand of Louis Vuitton, Dior and Tiffany & Co., among others — had the highest number of stores open, with a net increase of 108 stores between 2021 and 2022. LVMH also dwarfed every other company in luxury sales, with $85 million in total in 2022. Kering Group — parent to Gucci, Saint Laurent, Balenciaga and others — came in a close second, at 100 new stores, with Cartier owner Richemont in third, with 96 stores.
However, during a second-quarter earnings call, LVMH CFO Jean-Jacques Guiony acknowledged there had been a slowdown in luxury sales, saying that “aspirational consumers no longer spent on entry-level products.” LVMH itself saw its U.S. sales drop by 1 percent in the quarter while Cartier owner Richmand reported a 4 percent decline, as some of the COVID excesses subsided. Both companies, however, saw a fantastic rebound in Asia, especially as places such as mainland China and Hong Kong reopened.
The largest luxury U.S. lease in 2023 was a 36,000-square-foot Louis Vuitton deal on New York’s Fifth Avenue, followed by a 30,000-square-foot Chanel lease in Beverly Hills. The largest luxury lease in Miami was a 4,135-square-foot Ralph Lauren store in the Miami Design District.
Chava Gourarie can be reached at cgourarie@commercialobserver.com.
