KEY THEMES:
  • Luxury retailers are in the sweet spot. Luxury retailers are benefitting from income gains among the top earners and are thriving throughout many of the top global markets, including Paris, London, New York and prime cities in Asia. The growth in this sector is a key factor in driving expansion across the board, as noted below.
  • New supply is robust in developing markets. The global expansion of the workforce and the middle class is spurring a need for new supply, which is concentrated in developing countries in Europe, the Middle East and Asia that have economic growth, political stability, a growing middle class and business-friendly regulatory environments.
  • Optimism is tempered by threats to global economic growth and the specter of e-commerce. E-commerce is affecting both traditional and luxury retailers across the globe, exerting pressure on merchants to become more creative with concepts regarding their use of space. One popular strategy is to transform stores into product showrooms in an attempt to entice greater foot traffic and additional online sales.
  • Strong performance of high street markets and growing development in emerging markets. The generally positive outlook is underpinned by the economic recovery in the U.S. and strong job growth in many parts of the globe.