Though most luxury fashion brands shifted their focus to China in the last decade, US continues to be the world’s largest consumer market. In the last few years, many apparel retailers have made US their largest sourcing destinations. As per a Business of Fashion report, Zara parent Inditex stepped up operations in the US while Kering is recording strong sales in both North America and Asia. LVMH also recorded strong revenue growth in the US last autumn.

Low GDP growth, COVID surge sink China’s fashion market

In 2022, China expects GDP growth to sink to 5.5 per cent, lowest in over three decades. Even this target seems over ambitious for the country as unstable property market and strict COVID lockdowns threaten to curb consumption. China’s luxury sector witnessed a major upheaval last year as the government launched a campaign against wealth inequality. To contain COVID-19 spread across the country, China recently locked down some of its most important regions. All major shopping districts were deserted, though few brand stores continued to operate.

US gains on faster economic recovery and high-fashion events

All these factors helped drive luxury fashion brands back to America. Besides its economy has bounced back faster from the pandemic and brands like McQueen, Gucci, Bottega Veneta and Louis Vuitton are also staging high-profile events in the country. Louis Vuitton plans to stage its cruise show in California this May. Brands operating in the US are also looking beyond traditional fashion hubs of New York and Los Angeles to open new stores. They are expanding to cities like Miami, Austin, Charleston, Nashville and Atlanta. Kering plans to open stores in Nashville and Atlanta, as per Francois-Henri Pinault. Meanwhile, Prada aims to target Austin for future expansion.

And as Libby Callaway, Founder, The Callaway, a Nashville-based public relations firm says, more consumers are looking at spending their money in the US fashion market.

End of fiscal stimuli to impact spending However, this surge in US spending may prove to be short-lived as stimulus checks by the government have ended and are not expected to resume in 2022, as per Bank of America data. Consumers are less likely to spend at malls as indicated by the decline in retail sales to 0.3 per cent in February. Despite this, the US is fast merging as an ideal investment destination for luxury brands. The last two years have forced brands to diversify their supply chains. They are now looking at multiple markets instead of depending on a single destination and US is emerging as major beneficiary of this.