Retail Expansion Fuels U.S. Luxury Brands Across The Nation

Despite gloomy economic news and viral social media videos of stores closing, there is proof that the luxury retail sector in the United States is thriving, and it's due to a wave of retail expansion. According to a recent report by the global real estate services company JLL, luxury brands are making significant strides, with more than half of new luxury stores opening their doors in the ever-iconic states of New York and California. Even more intriguing, nearly 40% of these new store leases were secured in high-end malls across the nation.

In 2022, this retail expansion played a pivotal role in boosting U.S. revenue for luxury brands, pushing it to a remarkable $70 billion. This growth also translated into a massive increase in retail space, as luxury brands added over 650,000 square feet to their national presence.

This year's JLL luxury report marks the second edition of its kind, and it comes with an addition: published figures on the total square footage opened. Unfortunately, this means that we can't compare the data year-over-year, but one thing's clear – the luxury sector might have experienced a slowdown during the pandemic, but it's back with a bang. Leading the charge are industry giants like LMVH, Kering Group, and Richemont, which collectively opened 304 new locations, and interestingly, almost 40% of these new leases were signed with high-end malls.

Notably, some of the most prominent retail corridors in the country witnessed an upsurge in foot traffic, with New York City leading the pack. Times Square, SoHo, and Fifth Avenue, all located in Manhattan, experienced significant gains. Other cities like Boston, Chicago, and Las Vegas also saw impressive traffic increases, largely thanks to consumers eager to experience the luxury shopping scene.

New York's Madison Avenue made headlines with the grand opening of a 45,000-square-foot Hermès store, while brands like Valentino, Lanvin, and Van Cleef & Arpels also signed new leases on this iconic street. Meanwhile, the Beverly Hills Triangle area in Los Angeles took the lion's share of openings, boasting Givenchy, Loewe, Versace, and Chanel among its new additions. Chanel even dazzled with its 30,000-square-foot store on North Rodeo Drive, becoming the largest Chanel boutique in the U.S.

However, not all news was positive. San Francisco's Union Square saw a 12% decline in foot traffic, with around 40 retail stores closing in the area since 2020, including Anthropologie, CB2, and Nordstrom's flagship store.

Despite these setbacks, luxury consumers remain captivated by the sector. C. Ebere Anokute, national research manager for JLL, emphasizes that luxury's core consumer base continues to show a consistent appetite for luxury items, driven by robust earnings growth observed over the past year.

Nevertheless, high inflation rates pose a challenge for middle-income consumers who aspire to trade up but are hesitant due to economic uncertainty. As Anokute points out, this factor could play a crucial role in real estate decisions in the near term.

2022 and 2023 have seen remarkable growth for luxury brands in the U.S., with retail expansion as a key driver of success. While there are challenges on the horizon, the allure of luxury remains strong, ensuring that this sector will continue to shine in the years to come.

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Yvon Lux is the editor of her Apple News channel covering triumphs and challenges of the modern woman. Her “blogazine” celebrates sisterhood and empowers women by focusing on women’s health, travel, lifestyle, and entrepreneurial news while also sharing the most coveted beauty news and style stories.

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