Quick Facts
- Kering scheduled 100 additional store closures worldwide with Gucci accounting for the largest share of cuts
- Operating with 75 fewer stores in 2025 saved Kering $1.06 billion while maintaining higher-quality retail footprint
- New luxury retail square footage increased 65.1% in first half of 2025 despite overall store reductions
Luxury brands are closing underperforming stores while doubling down on flagship locations in top markets. The strategy reflects a fundamental shift in how high-end retailers approach physical retail amid declining consumer numbers and changing shopping habits.
Kering leads the consolidation with 100 additional store closures scheduled worldwide. Gucci will account for the largest share of those cuts. The company operated with 75 fewer stores in 2025, which translated to an 8% drop in inventories and cost savings of $1.06 billion.
Despite the closures, luxury brands are investing heavily in premium locations. In the first half of 2025, newly opened luxury retail square footage increased 65.1% compared to the same period in 2024. Between 2023 and 2024, at least 14 major real estate purchases by retailers including LVMH, Kering, Prada and Rolex occurred in New York City along Fifth Avenue, Madison Avenue and SoHo.
The global personal luxury goods market is expected to remain stable at €358 billion in 2025, down 2% from 2024 at current exchange rates. The number of luxury consumers dropped from 400 million in 2022 to around 340 million in 2025. New customer acquisition declined 5% between 2024 and 2025.
“After the shopping spree era, experiences and emotions have become the true engine of luxury growth,” said Claudia D’Arpizio, senior partner at Bain & Company and leader of the firm’s global Fashion & Luxury practice.
Consumer behavior is driving the strategy shift. The Vogue Business Index found 40% of consumers plan to shop less for designer fashion in 2025, while 27% will switch to less expensive products. More than half plan to wait for sales or discounts before buying luxury items.
Luxury brands are transforming flagship stores into experiential destinations with art installations, champagne lounges and VIP personalization salons. Technology integration includes virtual showrooms and digital flagship stores that replicate physical boutique ambiance.
Between 2023 and 2025, around 80% of luxury market growth stemmed from price increases rather than volume gains. McKinsey research shows high-net-worth individuals prioritize product quality, craftsmanship and better in-store service when deciding where to spend.
The market expects moderate growth to return in 2026 with low- to mid-single-digit increases over 2025. New York continues to lead as the top destination for new luxury store openings.
Read more: Fewer, Bigger, Better: How Luxury Brands Are Optimising Their Stores
