PARIS: THE HIDDEN OPPORTUNITIES IN LUXURY
IFDAQ is a luxury and fashion analytics firm that recently conducted a few analyses considering the different designer retails available in the market. The reason behind conducting this analysis was that IFDAQ wanted to know the places in Paris for luxury retail real estate or designer retails. In addition to this, they also wanted to know the emerging areas where brands are willing to invest their money and time. So, the best option to find out this was by conducting in-depth research. Many things were considered while performing the analysis, ranging from purchasing power to luxury store density to tourism flow and many more. IFDAQ has put in a lot of effort to produce the report, and the findings of the same can be trusted by most.
According to the report, Paris has many luxury stores, and many of them are there in the 8th and 9th arrondissements. The 8th arrondissement has Avenue des champs- Elysses while the 9th arrondissement has Galeries lafayette. The report also said that the demand for luxury items has also increased in the 1st, 2nd, and 6th arrondissements, but the density of the stores in these districts is not much appreciable. One of the findings indicates many developments worldwide, and all these developments reflect a shift from the famous districts of Paris to some non-popular ones. The different designer retailers present in the market are now willing to move to a new place and change how they did business before to give their brands and strategies a new face.
Knight Frank conducted some research and generated a report. The report states that the different designer retails have not been very severely hit by the hard lockdowns imposed throughout the world. The luxury boutique openings in Paris showed an optimistic picture as the new designer retailers that opened in 2020 were only five less than that of 2019. Also, there has been a forecast that 2020 will see 27 new stores opening in Paris. Earlier, the brands didn’t want to invest their time and money in areas that were in demand but were less crowded. But covid has changed a lot of things worldwide, leading to the change of the minds of many designers retails present in the market of Paris. Now the brands are ready to move to areas that are not so common.
The United States of America sets an example. Many of the high-value shoppers of the USA are now relocating themselves to outside city centers. So, now even brands in Paris are looking to invest in areas that might not have made sense a few years ago. The 8th arrondissements are very attractive for designer retails and the luxury market. Still, the traditional avenue Montaigne is losing popularity because of the importance to the Avenue des Champs- Elysees. The Avenue des Champs- Elysees gained so much popularity because the opening of the Dior flags in 2019 acted as a catalyst, and it led to the opening of Moncler in December 2020. In addition to this, we also have Saint Laurent opening its new branch in Avenue des Champs- Elysees in the upcoming days. The Avenue des Champs- Elysees was previously regarded as a mass market, and it was also not wrong, but now it is also considered a market for luxury items. This happened due to the establishment of so many famous brands in the avenue.
BREAKING DOWN THE ARRONDISSEMENTS OF PARIS
IFDAQ has its brand index, and the same index has three main segments in it. The name of those segments is luxury, premium, and prestige. The luxury segment is at the top and comprises Haute Couture and high jewelry brands. Next in the line is the premium segment, which is now regarded as the ready-to-wear accessible luxury. Brands like Chanel, Gucci, and Prada fall under the premium category. Finally, coming down to the prestige segment, this comprises influential but affordable brands. Ralph Lauren and Coach are some of the brands that fall under the prestige segment. All the segments of the said index have been clearly defined and can be used for reference.
In the 8th district of Paris, we have luxury, premium, and prestige bands of all three. In the luxury category, we have Cartier, Bulgari, etc. We have Christian Dior, Chanel, Louis Vuitton, and many more premium brands. Lastly, the brand’s Max Mara, Emporio Armani, and many more like this are considered prestigious. In terms of premium brands, the districts of 8th and 9th are considered to be saturated in nature. 1st, 6th, and 2nd districts show high demands for luxury brands, and these districts also show a growing shift. In the prestige category, districts 8th and 9th are considered saturated. District 16 has 33% demands for the prestige category, but it is undeserved. Opportunities for this category can also be found in the 7th and 15th districts.
The IFDAQ believes that districts 7th, 15th, and 16th are ready for opening some luxury stores, but the retail property experts have a different take on the same. They believe it is too early to say that these districts or avenues are ready for some luxurious brand. For example, Salmon of Knight Frank says that Le Marais has been famous for shopping and cafes for years now, but it is still not considered the true luxury destination for shopping for different brands. So, despite opening new stores in new locations, it is better to improve the existing stores that we already have. In addition, the quality of a store is paramount because the quality is the only thing that depicts that the brand conveys real luxury. Therefore, the existing stores should be renovated using better quality and sustainable material.
Covid has struck the entire world, and designer retails are no exception. The different brands are trying to readapt some retail strategies to come out of the shell that Covid has put them into. The brands are now trying to become more creative, and they are also coming up with pop-ups and short-term leases taking the lead. All these are not tried and tested, but it is just an experiment that different designer retailers present in the market are doing to renovate them and their brands. Their steps can be a success, but at the same time, they can also be a huge failure. This is just a testing period for all brands, and all we can do now is expect that these testing periods will prove beneficial to everyone.
CALL TO ACTION
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