Gucci, Chanel and Other Luxury Retailers Splurge on American Real Estate

livemint.com:

Luxury retailers are spending big on their U.S. real estate, more evidence of the staying power of in-person shopping. French jeweler Van Cleef & Arpels is opening a new Manhattan location on Madison Avenue.

Chanel recently reopened its Beverly Hills flagship after more than doubling its footprint to 30,000 square feet. Gucci is expanding throughout the U.S., and now counts eight Texas locations and a boutique in downtown Detroit. These operators are part of a wave of European and other high-end brands that are expanding more aggressively in the U.S.

They are signing leases for bigger space, offering more food and drink, and venturing beyond their traditional high-street addresses into new markets. Luxury retailers have leased 650,000 square feet of new space in the U.S. over the past 12 months, up from roughly 250,000 square feet the prior year, according to real-estate investment firm JLL.

Strong sales since the worst of the Covid-19 pandemic convinced luxury retailers of the importance of bricks-and-mortar stores and enabled them to open more locations, said C. Ebere Anokute, manager of retail research at JLL. “Luxury was one of the first categories to see sales return to prepandemic levels," Anokute said.

“Real estate was a big part of their strategy when it came to continued growth and expansion." Retail real estate rebounded quickly from the height of the pandemic as people flocked back to stores. Most retail sectors have performed well in recent years, aside from low-end malls. Luxury retailers have shone the brightest as wealthy Americans continued to spend despite high inflation and rising interest rates.