According to Savills latest French retail report the number of foreign retailers to open their first French store on Paris high streets almost doubled year-on-year in 2013.
According to Savills latest French retail report the number of foreign retailers to open their first French store on Paris high streets almost doubled year-on-year in 2013. Overall the research shows that brands from 21 different countries opened new retail units in the French capital last year, against 18 in 2012 and 11 the previous year. Furthermore, the share of international brands in Paris grew year-on-year from 27% to 39% in 2013 all of which, the firm suggests, is evidence that foreign retailers continue to see Parisian high streets as the gateway to France. Savills expects this trend to continue and predicts that over 40% of brands in the city will be international by year end with Tiffany’s & Co and Ferragamo among brands due to open new units in 2014.
The report attributes the growing activity from international retailers in Paris partly to the rising number of foreign tourists visiting the city every year, notably from China. In 2013 1.4 million Chinese tourists visited Paris, with 1.8 million expected in 2014, and 47% of the money Chinese tourist spend during their stay is directly on shopping according to data from FT China Confidential.
Christophe Gouny, head of retail at Savills France, says: “Paris is one of Europe’s key shopping destinations pulling in millions of foreign visitors every year making it a very attractive destination for international retailers to have a presence. The luxury goods sector is particularly dynamic and these retailers prefer to open stores in the traditional high end districts so that strong demand for these prime retail high street units is putting upward pressure on rents.”
Savills data records Zone A rents in Champs Elysees, Paris’ top high end retail destination, at €18,000 per sq m/per annum in Q1 2014, reflecting a 12.5% increase against the same quarter in 2013. Prime rents in competing shopping areas Rue du Faubourg Saint Honoré, Rue Saint Honoré and Avenue Montaigne have remained largely stable at €10,000 sq m/per annum, however the firm notes that several Q1 2014 deals in these locations have signed at higher rents, illustrating an upward pressure on rental values in these famous shopping districts.
According to the report the overall number of new openings on Paris high streets increased by 9.2% year-on-year in 2013 with new stores in the luxury segment increasing threefold in the same period. Brands including Dior, Chanel, Fendi, Versace, Moncler, Berlutti, Breitling, Omega and Cartier, among others, all opened new stores in 2013.
Savills research shows that the food and cosmetic sectors in Paris are thriving with the former driven by appetite from international food retailers. US chains are particularly active according to the report with Burger King having established its first Parisian outlet in the Saint Lazare train station in December 2013 and Bruegger’s Bagels and Steak’n Shake both due to open Paris branches in 2014. High-end cosmetic brands almost doubled the number of openings in the city in 2013 compared with the previous year according to the research. Significant new openings in 2013 include Caudalie, which launched its first Paris store, Roger & Gallet. Kiehl’s also opened two new premises and Chanel has launched a store dedicated solely to cosmetics and perfumes on Rue Saint Honoré.
Dior’s cosmetics line is also testing the Paris market via a new pop up unit in Rue Saint Honoré, highlighting the ongoing popularity of the pop up store concept in Paris, according to Savills. Further brands including Haagen Daaz, Converse and Happy Socks have all opened temporary stores on key shopping streets and the firm notes that pop ups are becoming increasingly prevalent in department stores and shopping malls where they are easier to set up. For example, Urban Outfitters and Topshop in the Galeries Lafayette, Uniqlo in the Bazar de l'Hôtel de Ville (BHV) and Toys R Us in Saint Lazare train station over the Christmas period.
Lydia Brissy, Savills European research director, comments: “Pop ups are a very useful tool for retailers to test out the market before committing to a permanent unit and shopping district. Overall, rising tourism combined with improving consumer sentiment is driving robust retail activity on Paris’ high streets and we expect this trend to continue as both domestic and tourist consumption increases.”