Cushman & Wakefield study shows that luxury brands are targeting physical expansion in Europe

Cushman & Wakefield’s study reveals a remarkable expansion of luxury brands in Europe, with a return to brick-and-mortar boutiques and increased investment in commercial real estate. This trend is accompanied by rising rents, cementing Paris as the luxury capital of the world 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 brick-and-mortar boutiques and an increased investment strategy in commercial real estate.

This is evidenced by Cushman and Wakefield, the world’s leading professional real estate firm, in its comprehensive report on luxury retail in Europe. The study, titled “European Luxury Retail”, provides an overview of current trends and key market developments.

With the phenomenon of the normalization of luxury demandHouses are betting on ever larger brick-and-mortar stores, allowing them to present a wider offer and promote a more engaging shopping experience, especially in the most prestigious locations.

The year 2023 thus saw a proliferation of luxury boutique openings throughout Europe. Cushman & Wakefield reports that 107 new stores opened in twenty prestigious streets, 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 jewellery, the rest including shoes, glasses and other luxury goods.

The dominance of luxury conglomerates

A third of the new openings are attributed to the three luxury giants – LVMH (9%), Kering (11%) and Richemont (13%). France, Italy and Great Britain accounted for half of these new stores, underscoring the importance of these markets for big brands.

The other two-thirds involve about sixty brands, inclusive Ralph Lauren, Burberry, Stone Island, Moncler, Tod’s, Swatch, OTB Group labels, Roberto Cavalli and Ferragamo. One-third of their stores are located in the same three destinations, while the other 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 high streets in 2024, notably for the 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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