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Luxury Retail Flourishes Amidst Decline in Downtown San Francisco September 01, 2023 (0 comments)


San Francisco, CA--In stark contrast to the soaring retail vacancies in downtown San Francisco, luxury retail brands are thriving and even expanding. 

[Image via Unsplash]

High-profile brands, such as Brunello Cucinelli, favored by tech giants like Jeff Bezos and Mark Zuckerberg, are indelible on the luxury retail landscape.

According to a news report in San Francisco Standard, while many mainstream retailers like Marshalls and DSW have exited Union Square, Cucinelli has effectively doubled its footprint, also introducing an in-store bar catering to Very Important Clients (VICs). This stark differentiation mirrors the larger narrative, with brands like Anthropologie, Crate&Barrel, and Nordstrom closing up shop around Union Square, resulting in a four times San Francisco's average vacancy rate. However, luxury seems immune to this trend.

The report noted that high-end brands like Yves Saint Laurent and Bottega Veneta are expanding their presence, even facing challenges like thefts. 

In the report, Neil Saunders, a retail analyst, suggests that luxury retail's resilience stems from its wealthy clientele's insulation from economic volatility and the experiential essence of luxury shopping. 

It's more than just shopping – it’s an immersive experience. This sentiment was evident when Chanel splurged $63 million on a building in the same area, focusing on markets with a concentration of extreme wealth.

Despite their expansion, representatives for these luxury brands remain tight-lipped about their real estate strategies.

However, the surge in luxury real estate grab hasn’t gone unnoticed.

In the report, veteran commercial real estate broker Julie Taylor observes that Union Square's luxury retail trend has picked up pace post-pandemic. Brands lower in the luxury spectrum are also trying to leverage the draw of high-end names. For instance, Banana Republic aims to reposition itself as a premium lifestyle brand by opening next to Chanel.

Learn more in the entire San Francisco Standard report.

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