Five U.S. cities—New York, Chicago, Las Vegas, Miami and San Francisco—have become the hot locations for luxury retailers to build storefronts. According to JLL's "The New World of Retail" report, these areas, followed by Dallas, Houston and Orlando, possess the attributes for better success due to population and income growth.
"Luxury goods embody elegance and acute attention to detail, and the storefronts and locations that encapsulate these treasures must be as unique as the goods themselves," said Michael Hirschfeld, senior VP of JLL Retail. "The retail elite typically flock to core cities where they tailor service and product mix to shoppers, but many of these metros are saturated and that's pushing expansion in secondary cities."
Luxury retailers have continued to see growth in the United States over the last few years. In 2013, the highest sales per square foot were luxury retailers located in New York, San Francisco, Miami, Los Angeles and Honolulu.
"Luxury customers spend twice as much as the average consumer, which is pushing the segment to prescriptively look at securing the right physical location," said Greg Maloney, Americas CEO of JLL Retail. "High-street storefronts are typically where luxury retailers make their market foray; however, the availability for flagship space remains short. Increasingly, brands are seeking additional space in core markets and turning to malls and outlet centers, which offer a strategic merchandising mix that creates strong synergies to drive sales."
The United States is the market of choice for luxury expansion because of the population growth, variety in market sizes and the growing influence of millennials on innovative retail concepts.
Recent luxury brand expansions in the United States include Diane von Furstenberg's flagship in New York's meatpacking district. The brand will undergo a renovation in January that will set the tone for future stores to come. The company is looking to expand to 200 stores in the United States. And Michael Kors (NYSE:KORS) is on track to open 45 new stores in the United States in 2015.
-See this JLL press release
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