Luxury firms continue to open new retail square footage at a similar pace to recent years despite economic and tariff headwinds. Current trends suggest luxury retail expansion will approach 2024 levels, with openings during the first and second quarters exceeding last year’s first-half total by 65.1%, according to JLL’s latest luxury retail report.
The fourth quarter is typically the most active season for luxury openings as retailers prepare for holiday shopping, while the summer months are usually slower for store openings. Last year, luxury openings totaled 196,563 square feet during the fourth quarter, the highest three-month total in JLL’s data series. However, a post-holiday slowdown failed to emerge this year as Q1 openings of 150,000 square feet nearly doubled last year’s Q1 openings. Second quarter openings dipped but remained historically strong this year, totaling nearly 80,000 square feet, which is more than every quarter but the fourth quarter in 2024.
Nearly two-thirds of new stores opened from July 2024 to July 2025 were located in street retail locations rather than malls, with an even split between prime and non-prime urban corridor locations, according to the report.
New York is the runaway leader in luxury retail store openings, with 42 between July 2024 and July 2025, representing a significant increase from 34 openings the year prior. Madison Avenue, Fifth Avenue and SoHo were the three most active urban districts across the country. Southern California continued to appeal to luxury brands with Beverly Hills, Los Angeles and Costa Mesa combining to add 19 luxury locations for the year ending in July. Miami added nine during the period.
The luxury segment is contending with historically low levels of newly constructed retail space, driven by rising construction costs, forcing them to compete for existing premium locations. Only 48.3 million square feet of retail space is under development, and new construction starts fell by more than half during the second quarter to only 4.9 million square feet.
The report noted a downturn in revenues for luxury conglomerates during the first half, and tariff challenges loom for many brands, some of which have shifted manufacturing locations and adjusted product lines. LVMH has indicated it is strategically expanding local production in the U.S. with a second Louis Vuitton facility in Texas to reduce import costs and enhance market responsiveness, while Kering warned tariff increases could negatively impact profit margins, particularly on products sold in the U.S.
Meanwhile, luxury retailers are finding success appealing to younger demographics as brands like Coach, Miu Miu and Byredo are achieving outsized growth with Gen Z and Millennial shoppers. Tapestry's Coach brand achieved a 14% sales increase in fiscal Q4 2025, and 10% for the full fiscal year, with Gen Z and Millennials making up 60-70% of new North American customers. Prada Group's Miu Miu saw a 49% retail sales surge in the first half of 2025 by leveraging viral marketing and pop culture to appeal to younger consumers, said the report
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