Mayfair is known to tourists and locals alike as an eclectic shopping hub, each street with its own personality. Regent Street is a medley of high-street and luxury brands, and while Bond Street and Dover Street cater to a fashion-forward, upscale set, Mount Street, with its mix of large and small international brands, also attracts deep-pocketed shoppers. Oxford Circus, meanwhile, offers fast fashion to young shoppers with stores like Topshop, Benetton, Hennes & Mauritz and NikeTown.
It’s no secret that sales at big brands are flourishing in London due to the international, big-spending traveler rather than the increasingly cash-strapped and cautious locals.
“Overseas visitors are driving sales growth,” said Michael Ward, managing director of Harrods, late last year during a roundtable breakfast sponsored by Walpole, the organization that aims to promote British luxury brands.
He said the Chinese, African, Thai, Indonesian and other Far Eastern tourists want super luxury brands. According to a recent report by Walpole and Ledbury Research, Americans remain the most important nationality of luxury visitors to the U.K., while the Chinese are the fastest growing group of luxury shoppers.
Retailers on and around Bond Street are certainly not resting on their laurels. The New West End Co., which represents businesses around Bond Street and Regent Street, has recently formed the Bond Street Retail Group. It comprises senior directors of various retailers who will manage a new multi-million pound investment and help curate the retail future — and infrastructure — of Bond Street.
Gary Saage, Richemont’s chief financial officer, said during a conference call this month that more than 50 percent of Richemont’s retail sales in Europe in the 2012-2013 fiscal year were from people who don’t live there. “European [growth] is down to tourist destinations. Domestic locations don’t perform as well. Clearly, tourism is the main driver in Europe, and a large component of that is Chinese tourism.”
That said, the line between high end and high street is not as distinct as it once was. “An element of blurring is beginning to occur, especially due to the number of American brands that are moving in. Seeing themselves as more high end than high street and with considerable means, they have been able to position themselves in premier shopping locations accordingly,” said Richard Scott of Nash Bond Retail Property. “Abercrombie & Fitch on Savile Row, for example, and Victoria’s Secret on Bond Street have completely subverted London’s previously strict and unspoken rules regarding luxury shopping. There are subtle tiers within each of these retail areas for each brand. For example, Bally is moving its location after realizing it was going to be situated next to Victoria’s Secret, clearly suggesting it felt it was not an appropriate pairing.”
Scott said he believes the “blurring” is pushing a number of high-end brands toward Piccadilly, for a variety of reasons.
“Many brands are not right for Bond Street. They want something smaller and more special. John Varvatos’ first store outside the U.S. will be on Conduit Street,” noted Scott. “Bond Street is touristy, and the brand has to be huge to be able to afford the location and be as big as ‘Bond Street.’ For example Chanel is paying in the region of 6 million pounds [$9.3 million] per annum for its Bond Street space. When you compare this with the 3 million pounds [$4.65 million] that Burberry is roughly paying for its Regent Street flagship, you can see the space is only available at a premium. That said, having a store on Bond Street can launch you in China — having a store there proves you have become a luxury brand.”
A spokesman for Adidas, which owns the upscale Y-3 label, offered, “Mayfair represents a diverse mix of brands from premium up to luxury. There has always been the loyal, high-spending customer, but now it also attracts young, creative professionals. The area was chosen because it is ideally located in central London but still retains a special charm and character. We love the heritage of Bond Street and Savile Row, but for Y-3, being a modern, contemporary brand, we felt Conduit Street was ideally suited. It already has brands such as Yohji Yamamoto and Vivienne Westwood, which we felt we could add to.”
Regent Street has also been flying high with openings of Burberry’s largest flagship and stores for Jack Spade and Juicy Couture. Plus, J. Crew and Longchamp are slated to open later this year.
“London was an easy decision, and Regent Street is the heart of London’s premier shopping district,” said Millard “Mickey” Drexler, chairman and chief executive officer of J. Crew Group. “It’s a place where people understand and respect the integrity of great style and design.”
Bond Street has seen an influx of stand-alone stores ranging from Tara Jarmon to Bottega Veneta to Victoria’s Secret. Openings on tap this year include Belstaff and Chanel, with Fendi coming in 2014 and Zegna tearing down its old store and expanding with a bigger one next year.
“Conduit Street was great, and it did well for us, but only if you knew about us. By returning to Belstaff House on Bond Street, we are bringing one of Britain’s best heritage brands back to one of the most renowned shopping streets in the world,” said Harry Slatkin, chief operating officer of Belstaff. “This is a big moment for us — this is Belstaff returning, firmly establishing ourselves as a British brand; embracing our heritage and demonstrating our modernity. We hope that with our new premises we can expand our customer base, reach out to people who may not have heard about our heritage and capitalize on Bond Street’s ability to draw crowds.”
Dover Street has seen the recent addition of Jimmy Choo Men, Christian Louboutin and McQ stores.
“Dover Street is fast becoming a shopping destination for a discerning international customer looking for luxury fashion and cutting-edge designers,” said Pierre Denis, ceo of Jimmy Choo, noting the new store is a key next step in the growth of the brand’s men’s business.
Dover Street is also home to stores including Dover Street Market, John Rocha, Acne and Vanessa Bruno.
Mount Street has added a few famous names to its retail roster, including Oscar de la Renta and soon-to-open Céline.
“Brands like Marc Jacobs, Céline and Oscar de la Renta are looking for something alternative,something off the beaten track,” said Helen Franks, director of commercial leasing at Grosvenor Estate, which owns the area. “These are brands that don’t want the hype of Bond Street. They want something more discreet and less obvious, which we feel we have achieved with Mount Street. North Mayfair is now a place we [want] to reposition, in particular Duke Street — leading toward Oxford Street and Selfridges. We hope to bring a number of high-end brands here, but also up-and-coming designers who would be unable to afford the high rents of Bond Street. This is an area that’s not yet on the map, but it will be.”
Retail in London continues to thrive despite the challenging fiscal climate.
“The West End is an incredibly resilient area, even in the toughest of economic climates as we are experiencing currently,” said Will Moss, head of Central London retail at estate agents Strutt & Parker. “In fact, it has actually bucked the trend, reporting consistent retail growth. The spending patterns of the highest net worth individuals has not been affected at all, due to the fact that London is a world-class shopping destination. We are spilling over into previously less-fashionable areas off Regent Street and Piccadilly as the West End continues to grow.”
Population: Just more than 8 million
Population change, past five years: +6 percent
Population projection: Just more than 9 million by 2020
Per-capita income: Analysts forecast that London’s GDP per person will increase from $65,698 (40,432 pounds) in 2010 to $95,266 by 2025 — a rise of 45 percent.
Disposable income: Inner London West had the highest disposable income, at 33,323 pounds ($50,874).
Key industries: Real estate, finance/banking, fashion, media, legal, accountancy/consultancy, creative industries
Number of malls: Three in the city of London; 87 in the greater metropolitan area
Mall developments: None
Where the growth is coming from/major construction projects: International tourists; major developments on Regent Street and Oxford Street by The Crown Estate, Great Portland Estates, Aviva, Prudential and Land Securities; Bond Street development by Great Portland Estates
HOT SPOT: SHOREDITCH
Luxury retailers have set their sights on Shoreditch, in East London, with big brands’ less-expensive lines, such as Miu Miu, expressing interest in the East End, say real estate sources.
Shoreditch, once notorious for its poverty, crime rate and bleak former industrial spaces, has emerged as an ultrahip neighborhood with art galleries, bars and emerging fashion labels setting up shop. Spitalfields, Shoreditch and Redchurch Street are all on the rise. A number of luxury brands are looking to these areas, in particular the brands around Dover and Albemarle streets, in a bid to reengage with younger customers on a brand level.
But it will take two or three big brands to make the move successfully for others to follow. While there was talk in the British press of Christian Louboutin, Prada, Ralph Lauren and Vivienne Westwood moving into the neighborhood, they have all confirmed they have no plans to set up shop anytime soon.
With the private members’ club Shoreditch House, and nearby Hoxton Square home to Electricity Showrooms and the White Cube Gallery, brands are counting on reasonable rents and the influx of the affluent market.