Luxury retailers are still expanding their brick-and-mortar footprints in the United States despite headwinds from the economy and tariffs.
In the first half of the year, store growth substantially increased for upscale chains, with newly opened luxury retail square footage rising 65.1% compared with the same period in 2024, according to a JLL report released Tuesday. Luxury chains debuted 226,513 square feet of store space compared with 137,186 square feet in the prior year, the real estate firm said.
Luxury retail has been rebounding for several years in the wake of the COVID-19 pandemic, according to the report. But this year, challenges appeared, including the impact of tariffs and heightened economic uncertainty. Nonetheless, the sector so far has remained resilient in terms of its real estate plans, JLL said.
“While some luxury brands and conglomerates have reported declining revenues, these headwinds have not yet translated into significantly reduced store openings,” JLL’s report said, adding that “newly opened retail square footage has maintained a similar pace compared to recent years.”
In fact, in the second quarter, luxury retail openings — 79,625 square feet — exceeded three quarters in 2024, suggesting continued market momentum despite a summer slowdown, according to JLL.
“While the full-year 2025 results remain to be seen, current trends suggest luxury retail expansion will approach 2024 levels,” JLL said.
The biggest growth this year may be yet to come, as the fourth quarter remains the peak season for luxury opening, with the final quarter last year seeing 195,563 square feet of luxury retail space opening, according to JLL. That included Louis Vuitton’s debut of a temporary flagship store on 6 E. 57th St. near Fifth Avenue in New York.
“Retailers consistently favor fall openings for maximum holiday impact, while summer quarters typically show lower activity as brands prepare for peak shopping seasons,” JLL said.
But the sector’s challenges go beyond tariffs to include dips in global tourism, according to JLL.
“This year’s decline in international visitors to gateway markets such as New York City, Los Angeles, and Miami is expected to impact luxury retail,” JLL said. “However, domestic tourism remains robust and may partially offset the revenue lost from international luxury shoppers.”
JLL’s report also documented three trends: upscale retailers favoring street-level locations rather than malls; New York remaining the top destination for luxury store openings; and growth in the upscale market being driven primarily by Generation Z and millennial shoppers.
New York is still the winner in terms of being the top destination for luxury brands looking to establish or expand their presence in the United States, according to JLL. The city saw 42 new luxury openings between July last year and July this year, an increase from the 34 openings reported last year, JLL said. The three areas seeing the most activity were Madison Avenue, Fifth Avenue and SoHo.
Madison Avenue had Dior, Dolce & Gabbana, Giorgio Armani, Van Cleef & Arpels and Santoni debuting, according to JLL. In SoHo, Balenciaga, Antonio Marras, Zimmerman, Dries Van Noten and John Varvatos opened up shop. And on or near Fifth Avenue, Prada and Hublot bowed in along with Louis Vuitton.
A trio of Southern California cities — Beverly Hills, Los Angeles and Costa Mesa — combined had 19 luxury openings, according to JLL. Rolex, Casablanca, Boucheron and Givenchy came to the Los Angeles-Beverly Hills triangle, a term generally used for an area that covers Beverly Hills and the Los Angeles neighborhoods of Bel Air and Holmby Hills. There were also nine luxury store debuts at South Coast Plaza mall in Costa Mesa, JLL said.
The study found that upscale retailers favor street-level locations instead of malls, with 59% of openings from July last year to July this year at stand-alone storefronts.
Younger shoppers, Gen Z and millennials, are “reshaping the luxury landscape” and driving revenue growth for brands like Tapestry’s Coach and Prada Group’s Miu Miu, according to JLL. Coach has had effective marketing, while Miu Miu has been “leveraging viral marketing and pop culture to appeal to younger consumers,” JLL said.