London remains key target for international premium brands opening stores
London’s key central shopping areas continued to be a major draw for global fashion and accessories brands last year and, importantly, the trend is expected to continue in 2023.
Some 21 international fashion and footwear brands opened debut London stores last year, according to figures from property consultant Savills.
While the latest number is down from a peak of 27 in 2019, it’s ahead of the five-year pre-Covid annual average, and more than double what was seen in 2021 when the pandemic devastated high street retail.
According to Savills, premium fashion brands continue to dominate, with the luxury sector slightly more active than in 2019. Last year there were nine luxury new entrants marginally ahead of the six seen in 2019. The remainder of the new entrants were aspirational mid-market/premium brands.
Further good news for the UK’s capital is that Savills expects more premium international brands to make their London debut this year, with a focus on areas such as Mayfair and Marylebone.
That optimism is backed by real estate agent Colliers, which has cited at least 50 international and domestic companies waiting to open new or additional stores in the capital’s Zone 1 area this year.
Meanwhile, Nash Bond which advises landlords and tenants on retail deals, said it has seen a “steady increase” in demand for London stores over the past six months.
Savills retail research director Marie Hickey said: “In spite of the current headwinds, the fundamentals of London as a retail destination remain robust.
“Sentiment among many brands, particularly those in the premium and luxury market, remains positive and there is an expectation that luxury spend should remain relatively resilient in the face of the forecast short and shallow recession.”
However, a major frustration for the high-end market has been the scrapping of VAT-free shopping in 2021. Retailers fear international tourists will favour Paris and Milan for their major purchases. Mulberry this month said the lack of VAT-free shopping “has been particularly felt on Bond Street,” and was a key reason to shutter its store there.
However, Helen Brocklebank, chief executive of luxury goods trade body Walpole, told The London Evening Standard that the capital remains a major draw: “The blend of incredible cultural attractions, world-class hotels and restaurants and shopping opportunities make it a mecca for domestic customers and international visitors alike.”
Also key has been the arrival of the Elizabeth Line train transport link that has boosted Oxford Street and nearby shopping streets. And some tourists have started to return, despite the VAT issue, with Americans still regarding London as a must-visit destination. The easing of China’s Covid restrictions should boost travel from that key country too.
Another plus is expected to be a business rates revaluation in parts of the West End, with many expecting a reduction from April. Retailers on the capital’s most popular shopping street are expecting to see £96 million cut from their collective bills in the new financial year.
That could ease the pain of high rents in Central London and mean key names continue to commit to the most expensive shopping areas.
Savills said Bond Street (three) and wider Mayfair streets (three) featured as top locations for new openings last year but Soho topped the list with four (including New York-based fashion brand Aime Leon Dore and Copenhagen’s Stine Goya).
The most active in terms of origin were US high-end fashion brands. Seven opened a key UK store last year including Marc Jacobs making a return by opening a standalone store on Regent Street. Other key names include Rails, Alice & Oliva and Veronica Beard.
In 2023, premium international brands expected to make their London debut with a continued focus on Mayfair, Kings Road, Marylebone and Westbourne. Three have already opened or are in the pipeline, including Brazilian brand Farm Rio set to open on the Kings Road.
Savills added: “Sentiment amongst premium and luxury brands continues to remain robust. Many traded very well during/post-pandemic with expectations that luxury spend should remain relatively resilient in the face of a short and shallow recession. This, alongside realisation that now may be the opportune time to secure retail space on more attractive terms than would have been the case pre-covid, is helping to bolster activity”.
“This is also being reflected in the fact that many of these new entrants are looking to expand their store footprints in London, it’s not just a case of opening one store but also looking for opportunities within the affluent London villages post the flagship”.
Copyright © 2023 FashionNetwork.com All rights reserved.