According to a recent report by JLL, the United States continues to be one of the top global markets for luxury goods, with significant retail activity observed in the sector between July 2023 and July 2024. Luxury brands leased over 360,000 square feet of space during this period, with nearly half (48.5%) of new openings occurring in malls and the other 48.5% in street retail. Other types of locations made up the remaining space.
Global luxury retail sales reached over $75 billion in 2023, with the U.S. and Europe accounting for approximately 28% of the total sales. The global market is expected to grow at a compounded annual growth rate of 1.9% from 2024 to 2028, with sales anticipated to exceed $82 billion by 2028.
Mall Openings Continue to Thrive
While the availability of retail space in prime street corridors remains limited, top-performing malls like South Coast Plaza in Costa Mesa, California, and Phipps Plaza in Atlanta have seen an influx of luxury store openings. According to the JLL report, these malls are expected to continue providing opportunities for luxury brands as demand for high-quality retail space persists.
Street Retail Focused in Key U.S. Cities
New York City and Los Angeles remain significant hubs for luxury retail. The report highlights a resurgence on Madison Avenue, with several high-end brands securing space in this prime area. In Los Angeles, the continued presence of luxury brands in Beverly Hills reinforces the city’s role as a key destination for affluent shoppers. In total, street retail accounted for 40.9% of new luxury store openings, with a large portion of those in prime corridors like SoHo, Fifth Avenue, and Miami’s Design District.
Other Trends and Insights
The report also notes ongoing mergers and acquisitions in the luxury retail sector, such as the Tapestry-Capri Holdings merger, and the potential impact of these changes on the industry. Additionally, it highlights the recovery of international tourism to pre-pandemic levels by 2025, which could benefit luxury retail through increased travel and hospitality partnerships.
Despite challenges such as inflation and limited supply, the report emphasizes the importance of luxury brands reaching younger and more diverse consumer groups, who are expected to drive future spending. To strengthen their market position, many luxury brands are investing in prime retail locations and expanding their store footprints.
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