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Insight of the Day: Cushman & Wakefield study shows luxury brands aiming for physical expansion in Europe

Key points:

  • Luxury brands are expanding their physical presence in Europe, with 107 new stores opening in 2023.

  • This trend is driven by the normalization of luxury demand and the desire to offer a more immersive shopping experience.

  • The majority of new stores are in the apparel and accessories sectors, with a significant portion dedicated to watches and jewelry.

  • Luxury conglomerates like LVMH, Kering, and Richemont are leading the expansion, accounting for a third of new openings.

  • France, Italy, and the UK are the top destinations for new luxury stores.

  • Rents for prime retail locations are rising due to high demand and limited availability.

  • Paris remains the world's luxury capital, but other cities like London, Milan, and Rome are also seeing significant growth.

Implications:

  • The luxury retail industry is optimistic about the future and is investing in physical stores to meet growing demand.

  • The expansion of luxury brands is creating jobs and boosting local economies.

  • Rising rents could make it difficult for smaller, independent luxury brands to compete.

  • The focus on immersive experiences could lead to a shift in how luxury brands design and operate their stores.

  • The continued growth of luxury retail in Europe is a positive sign for the overall economy.

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