The global market for luxury goods has emerged from the financial crisis significantly faster than expected, according to a study of Europe's most important luxury shopping destinations by Jones Lang LaSalle.
Walter Goossens, Head of Retail Leasing Agency Belgium at Jones Lang LaSalle, said: "The luxury sector is the most internationalized in the retail market, with brands adopting true global strategies. Most have big expansion plans into Asia and emerging markets, creating a new class of high-income consumers with an appetite for luxury goods.
"However, they have also resumed investment into the mature western markets via extensive refurbishments and expansions of existing stores, appreciating the international appeal of the traditional high end luxury retail districts in London and Paris for instance."
London's New Bond Street is the most expensive luxury shopping street in Europe, with top rents reaching 7,900 per m². On Avenue Montaigne in Paris rents reach up to 7,500 per m² and on Moscow's Stoleshnikov Lane rents are as high as 7,015 per m². The top five are completed by the Italian luxury shopping locations, Via Montenapoleone in Milan and Via Condotti in Rome. Luxury shopping streets in Brussels and Antwerp all range between 1.500 and 2.000 per m².
Walter Goossens, Head of Retail Leasing Agency Belgium, continued: "Despite the booming online offerings, retailing on Europe's most prestigious high streets remains a very important success factor for the luxury segment. After two years of subdued spending, luxury retailers are responding to the return in consumer confidence with healthy expansion plans.
"Increased demand for prime space in the best locations is forcing rents up. Other retailers are also looking to benefit from the proximity to famous top-level brands, and this additional demand for scarce showroom space is placing even more pressure on premiums."
Leading international luxury groups have recently reported double-digit sales growth or even record annual sales. Companies' own store networks have played a significant role in accounting for this success, with business also driven by Asia, particularly the booming Chinese market. The luxury retail sector has also bounced back in Europe; in 2010 between one-third and 40% of total revenue came from Europe for some brands with the highest sales recorded in Italy, followed by France, the UK, Germany and Russia.
The highest density of international luxury labels can be found in Paris. From the top 100 luxury labels, they operate more than 150 luxury stores, proving the French capital remains Europe's uncontested center of fashion and luxury shopping. Only London has a similar density with 125 luxury outlets from the top 100 brands. Milan has just under 90, while Moscow and Rome follow behind with 66 and 59 luxury label stores, respectively.
Source: Jones Lang LaSalle