London remains a highly sought-after location for international premium brands hoping to establish a presence with physical stores, according to property consultant Savills. Despite the difficulties presented by the Covid-19 pandemic, Savills’ data reveals that 21 international fashion and footwear brands opened their first London stores last year. While this figure is slightly lower than the peak of 27 in 2019, it still surpasses the average of the five years preceding the pandemic, indicating a positive trend.
Savills reports that the majority of these new entrants operate in the premium fashion sector, with nine luxury brands debuting in London in 2021, slightly more than the previous year. The remaining new arrivals were mid-market to premium brands. The luxury sector is forecasted to experience further growth this year, with more international premium brands expected to make their debut in London. Areas such as Mayfair and Marylebone are projected to be the focal points for these new store openings.
Data from real estate agent Colliers supports this optimistic outlook, identifying at least 50 international and domestic companies that intend to open new or additional stores in London’s Zone 1 area in 2022. Nash Bond, an agency advising landlords and tenants on retail deals, has also observed a consistent increase in demand for London stores over the past six months.
Marie Hickey, Savills’ retail research director, emphasized that despite ongoing challenges, London remains a robust retail destination. Brands, particularly those in the premium and luxury market, maintain their optimism and expect luxury spending to hold up well, even in the face of a predicted economic downturn.
However, the removal of VAT-free shopping in 2021 has presented a significant setback for the high-end market. Retailers are concerned that international tourists will choose alternative destinations like Paris and Milan for their major purchases. Luxury brand Mulberry recently cited the absence of VAT-free shopping as a key reason for closing its store on Bond Street. Despite this, Helen Brocklebank, CEO of luxury goods trade body Walpole, believes that London’s cultural attractions, hotels, restaurants, and shopping opportunities continue to make it an appealing destination for both domestic and international customers.
The introduction of the Elizabeth Line train transport link has also had a positive impact on the shopping scene, particularly on Oxford Street and nearby streets. Additionally, tourists are beginning to return, with Americans still considering London a must-visit location. The relaxation of Covid restrictions in China is also expected to boost travel from that important market.
London’s West End retailers are set to benefit from an upcoming business rates revaluation, with many anticipating a reduction in rates from April onwards. This reduction could help alleviate the financial burden of high rents and encourage key brands to continue investing in the city’s most expensive shopping areas.
Savills has identified the top locations for new store openings in 2022, with Bond Street and Mayfair being prominently featured. Soho leads the list with four new openings, including brands like Aime Leon Dore from New York and Stine Goya from Copenhagen. Last year saw the most new entrants from US high-end fashion brands, with seven stores opening in the UK, including the return of Marc Jacobs with a standalone store on Regent Street.
Looking ahead to 2023, Savills predicts further debuts by premium international brands, with a continued emphasis on Mayfair, Kings Road, Marylebone, and Westbourne. Some brands have already opened or are in the process of opening, including Brazilian brand Farm Rio on the Kings Road. Savills notes that premium and luxury brands remain optimistic, and their expansion plans extend beyond opening a single store, with a focus on establishing a presence in the affluent London neighborhoods following flagship store openings.
In conclusion, London maintains its status as a global fashion destination, despite the challenges faced by the retail industry. The city’s distinctive combination of culture, hospitality, and shopping opportunities continues to attract brands, tourists, and customers alike, thereby cementing its position as an exciting and thriving hub for the fashion industry.
Links:
1. Savills Report on London Retail
2. Colliers Report on London Store Openings
