Today KLM Retail in partnership with FSP, the UK’s leading retail business consultancy, have issued the second edition of The Central London Retail Update. This quarter we are looking at the significant shifts moving through London’s luxury retail property market and its position in the global arena. Right now London is benefiting from its position as a truly global luxury retail destination; an attractive exchange rate, security concerns in other global cities and an already strong luxury proposition have given rise to this.
Trends in luxury retail property
A major trend is high-end brands chasing more footfall. Brands like Coach, Mulberry and Ralph Lauren responding to growing consumer demands for “affordable luxury”, following the higher volume of footfall found towards Regent Street. They no longer feel the need to be seen as solely “Bond Street brands” as Regent Street builds on its increasingly premium offer, with more affordable rents, discounts as well as more footfall.
At the same time, luxury brands are differentiating to capitalise on tourist spend. Consumers visiting the capital are more likely than ever to buy a small luxury memento while in London, as the kudos attached to it becomes part of the experience. To capture this spend more effectively, brands are opening stores in higher-volume tourist areas such as Mulberry in Covent Garden, as well as offering edited ranges to encourage spend.
With a reduction of premiums, we’re seeing more innovation in the luxury market too; Chanel’s pop-up in Spitalfields is a great example of how, with a mature model in luxury pitches, brands are looking to reach new audiences.
What’s ahead in the world of luxury?
Despite seemingly seismic shifts, in a world of uncertainty, people will come back to quality. Brexit hasn’t destabilised investment in London and more brands are looking to enter what remains a growth market.
Elsewhere, retailers are becoming more pitch sensitive as explosive growth rates make some locations unsustainable. The increase in property costs means that acquiring the wrong store is more costly than ever so retailers are preferring to wait for the perfect pitch.
Increasing property costs have also led to more leases on the market. With more supply coming through in key locations such as Bond Street and Oxford Street, innovation will be key for landlords, Cork Street is a great illustration of the first street dedicated to art, creating a point of difference and huge point of attraction.
To read the update please click here
To receive a copy of the next update please email ahildebrand@klmretail.com
BACK