Luxury goods giants expand countercyclically! LVMH and Kering Group are ramping up their European offline stores in the industry's cold winter.

Notice that, despite the overall slowdown in the luxury goods industry, companies such as Gucci, Fendi, and Bulgari, saw an increase in the number of stores opened in Europe last year. According to data compiled by global real estate brokerage firm Knight Frank, the number of stores opened in Europe's leading luxury retail districts increased by 13% last year. LVMH, Kering Group, and brands under the Richemont Group accounted for nearly a third of these new stores. In 2025, a total of 96 new stores were opened in the region, higher than the previous year but lower than the 107 opened in 2023. Paris experienced a decrease in store openings in 2024 due to hosting the Olympics, but last year, new stores in Paris accounted for more than one-fifth of the total. During this "ribbon-cutting spree," retailers are focusing on attracting increasingly discerning consumers. With the global economic outlook deteriorating, luxury consumption, after experiencing explosive growth following the pandemic, is now slowing down. Knight Frank pointed out that physical stores have become key in attracting buyers. Sally Bruer, Head of Retail Research for Europe, the Middle East, and Africa at Knight Frank, said: "The strategic position of physical stores is rising, not declining." In January of this year, LVMH reported poor sales performance during the Christmas holidays and predicted that the situation would not improve much in 2026, dampening hopes for the recovery of the luxury goods industry. In the fourth quarter of 2025, three out of five departments under this fashion giant did not meet expectations, leading its CEO Bernard Arnault to inform investors that the group would therefore limit spending. At the same time, Gucci, under the Kering Group, saw a 10% decrease in sales, despite this being the smallest decline in two years. Luxury goods stores saw a 13% increase in the number of openings in Europe last year. However, approximately half of the new stores opened last year were from high-end fashion and accessory brands, and luxury perfume brands also saw expansion. Bruer mentioned: "We saw 6 luxury perfume stores opened this year, all in Paris." Compared to individual items such as jewelry and watches, perfume is particularly popular due to its relatively lower entry price. LVMH, with brands like Louis Vuitton and Dior, was the most active retailer; followed by the Kering Group, with new stores including two each for Saint Laurent and Bottega Veneta. The report also stated that after several years of strong expansion, Richemont, which owns Cartier and Panerai, saw a decrease in the number of new stores opened. The extremely low vacancy rates in popular shopping districts have put pressure on rents for prime locations, with rents increasing by 3.5% last year. Duncan Gilliard, Director of Retail for Knight Frank in London's Central District, stated that consultations have not cooled down this year. He added that if transaction volumes do indeed decline, it will be "due to a historical low in supply, rather than necessarily a demand issue."