In 2023, luxury store openings worldwide experienced a slowdown, dropping by 13 percent says a report by Savills, a global estate agency. However, prospects for 2025 appear promising as more properties become available and consumer spending rebounds.
The report advises luxury brands to explore beyond traditional locations like capital cities and leisure destinations, suggesting opportunities in affluent regions like China, India, and Dubai.
Anthony Selwyn, Co-head of Global Retail at Savills, emphasized the potential for growth, urging brands to seize opportunities in an expanding luxury landscape. Despite the overall decline, certain regions saw increased activity. The Asia-Pacific region witnessed a notable 31 percent rise in luxury store openings, with China dominating despite a slowdown in activity.
North America also experienced growth, particularly in cities like New York and Los Angeles. However, Europe lagged behind with a 17 percent decline, attributed to limited availability in prime luxury locations following an 83 percent surge in openings in 2022.
Marie Hickey, director of Commercial Research at Savills, attributed the slowdown to the normalization of markets following the pandemic-induced surge in store expansions, especially in China.
Despite short-term challenges, Hickey noted an enduring appetite for luxury brands to optimize their real estate portfolios, especially in emerging markets like Asia and the Middle East.
The report identified cities such as Shenzhen, Hangzhou, and Wuhan in China, along with Mumbai, Delhi, Jakarta, Bangkok, and Dubai, as underserved markets ripe for luxury store openings due to their size, growing affluence, and relative lack of luxury brand presence.
Overall, the report underscores the resilience of the luxury retail sector and the importance for brands to strategically expand into emerging markets to capitalize on future growth opportunities.
