While the Bernard Arnault-owned company is known for shiny bags, perfumes and clothing, it also wants to get in on the game when it comes to entire shopping districts around the world.
Whether it’s legacy properties like New York’s Fifth Avenue and Paris’s Champs-Elysees, or new warehouse-turned-stores like Miami’s Design District, the French conglomerate is investing in real estate across the board—either directly or through its division direct investment. , L. Catterton.
Target? To make sure it can maintain its presence where people spend the most. LVMH’s investment in real estate is growing: in 2023, the owner of Christian Dior set a new record for real estate investment, reaching approximately 2.45 billion euros ($2.62 billion).
“All roads lead to real estate,” said Michael Burke, head of LVMH Fashion Group. Wall Street Journaladding that the most valuable luxury company is creating its own city through controlled real estate.
In Miami, where LVMH is investing in the Design District through L Catterton, the French company’s influence is like no other—whether in the district’s tenants or even local artwork.
What most of these shopping areas have in common is that LVMH brands – from Tiffany’s to Louis Vuitton – are located side by side with luxury industry competitors. That’s the point, Burke said.
“If we don’t have competition, we won’t have a new city,” Burke said. “We take something that doesn’t exist and when we finish it creates a city center with residential, retail and cultural aspects.”
Fashion companies have recently become the impetus for other major real estate purchases. Take Gucci owner Kering: it just shelled out 1.3 billion euros ($1.4 billion) for a new store in Milan, which is also home to LVMH-owned Italian café brand Cova. Earlier this year, the company also acquired property in New York worth $963 million. LVMH was in negotiations with to buy another prime property in New York, for which she is competing with other luxury houses such as Chanel.
Luxury goods companies are facing tough times as people cut back on spending amid the COVID-19 boom. However, stores emptied and the path to recovery has been sluggish since then.
Now there’s finally light at the end of the tunnel, prompting luxury giants to take a leap into personal shopping. Data from 16 luxury streets in Europe shows an almost complete recovery in average rents. mid last yearAccording to Savills.
“Brands are looking to locate in city centers to increase their visibility among more shoppers, taking advantage of strong increases in footfall on key European shopping streets,” Larry Brennan, head of European retail agency Savills, said in a note in November.
The desire to attract more customers by being located on the most famous and popular streets in the world is undoubtedly one of the reasons why luxury brands are buying up real estate, but it is also just more economical be your own landlord, given that rents in prime shopping areas can be astronomical.
“We are trying to secure and buy the best locations for our companies,” Arnault said during a financial conference call in January.