Luxury store openings slowed worldwide in 2023, but several regions bucked the trend, according to a new report from the international estate agents Savills. China, “the engine of store expansion” which accounts for 41% of all openings globally, saw the number of new locations drop 12% amid weaker consumer confidence.
China may have slowed, but the wider Asia Pacific region, with a global share of 17%, recorded a 31% increase in new stores, led by Japan and Singapore, helped by improving tourist spend (and the weaker yen in the case of Tokyo), plus a relaxation of visa restrictions for Mainland Chinese tourists. Across the Pacific, North America’s new store openings were up 12% with New York and Los Angeles being the principal hotspots of activity.
Europe recorded a 17% a drop in luxury openings. However, Savills said the decline was not due to a reduced appetite for luxury real estate, but a reflection of limited availability across the continent’s key luxury streets following an 83% increase in store openings in 2022. Middle East also saw its share of global new openings in 2023 squeezed.
Fashion & accessory brands continued to be the most expansive in 2023, accounting for 63% of all new store openings globally. The big three groups (LVMH, Richemont, Kering) continued to dominate new store openings globally in 2023, with them accounting for 39% of all new openings, up on their 32% share in 2019.
Looking ahead, the researchers said weakening consumer confidence in China is likely to dampen confidence in store expansion this year and into early 2025. Beyond China, the real headwinds to store expansion will not be weakened appetite but rather reduced availability in prime luxury retail destinations. On the flip side, this is helping to open up new real estate opportunities in key luxury streets where the traditional prime pitch is more constrained, Savills said.
Savills is a British real estate services company based in London. It is listed on the London Stock Exchange and is a constituent of the FTSE 250 Index. The company provides property consulting services from offices throughout the Americas, Europe, Asia Pacific, and Middle East.
