Luxury retailer activity remains high and focused on EMEA’s key luxury streets, Prague’s city centre being no exception. In and around Pařížská street, 50 luxury and premium brands are present, the highest number of all luxury locations in CEE. At the end of 2023, Pařížská had no vacant space, as did another six of the 20 luxury shopping destinations in 16 cities across 12 European countries monitored in Cushman & Wakefield’s European Luxury Retail Report 2024. Last year, the luxury sector performed strongly, with brands opening 107 stores in EMEA markets, 5 of them in the Czech Republic.
The Czech Republic, or Prague, is the most important destination for luxury retail in Central and Eastern Europe. Prague’s high street, especially Pařížská, offers 50 luxury and premium brands, most of them represented directly. Brands such as Louis Vuitton, Dior, Gucci, Hermès, Chanel, and Prada have located their largest stores in the region in Prague – and no other Central European destination has as many brands in terms of quantity and direct representation.
Zero vacancy
With 0% vacancy in the existing premises in Pařížská and its surrounding streets, retailers’ opportunities to secure space are challenging, particularly for in-demand larger stores. Such situation prevails in most of the 20 luxury destinations in Europe monitored: 16 of them have vacancy rates below 5%, and 7 have zero vacancy.
Jan Kotrbáček, Head of Retail Agency, Central and Eastern Europe, Cushman & Wakefield: “These demand-supply dynamics are keeping upward pressure on rents which we have seen recovering in luxury streets at a faster rate than for all high streets across Europe.”
New shops, new schemes
Prague’s luxury retail precinct saw five new luxury store openings in 2023. In Pařížská, Polo Ralph Lauren unveiled its new flagship store and the brand’s first full-price store in the Czech Republic, and Jimmy Choo opened new Czech flagship store after a year’s absence. Luxury watch retailer Rado, ready-to-wear brand Zadig & Voltaire, and winter clothing brand MooRER opened in nearby streets.
At the end of 2023, Pařížská had no vacant space, reflecting the level of demand in this key luxury destination. This constraint in supply and high levels of retailer interest in the street have led to new development being brought forward, which will create fresh opportunities for retailers desiring space in this sought-after luxury area. Two projects are to be completed in 2024 that will enlarge the existing 20,000 sq m of desirable retail space by more than 15%:
- The former InterContinental hotel is being transformed into the new five-star Fairmont Golden Prague, and the development will add six new retail units, totalling nearly 2,400 sq m.
- Kaprain Real Estate’s Pařížská 25 development will deliver an additional nearly 1,000 sq m of luxury flagship retail space.
Jan Kotrbáček, Head of Retail Agency, Central and Eastern Europe, Cushman & Wakefield: “We see that the trend among the world’s most prominent luxury brands is to build dominant stores that well represent the size and strength of the brand, offering customers the full breadth of the range and great shopping experience. Both the Fairmont Golden Prague and Pařížská 25 projects fit perfectly into this strategy as they will provide the highest quality and most modern retail space on the market in a variety of sizes to meet market demand. I am convinced that the completion of these two major projects will have a significant impact on increasing Pařížská street’s attractivity.”
Fashion, jewellery and watches
With sales of EUR 0.7 billion in 2023, the Czech luxury retail market achieved an 8.1% increase year on year. Along with developments in the other 15 European cities surveyed, it confirms that luxury markets remain resilient, bolstered not only by high-wealth luxury shoppers but also the return of high-spending tourists to Europe.
Most of the expanding brands last year were in the fashion sector, accounting for more than 60% of all new store openings. Luxury jewellery and watch retailers came second, with 20% of store openings. One third of all new stores are under the trio of major luxury goods concerns LVMH, Richemont and Kering.
Luxury goods retailers feel the importance of integrating their brands into their customers’ lifestyles. Dior has opened a new Monsieur Dior restaurant, Ralph Lauren is successfully going with its Ralph’s Coffee concept, and brands such as Louis Vuitton, Versace, Gucci, and Breitling are following suit by also opening restaurant concepts. Beyond dining, luxury brands are also heavily involved in the hospitality industry. Bulgari recently opened a luxury hotel and spa in Rome, while Louis Vuitton announced its first hotel on the Avenue de Champs-Élysées in Paris. While the Czech Republic is still waiting for its hotel of this kind, the above-mentioned new Fairmont Golden Prague, due to open later this year, will offer a combination of luxury accommodation and luxury shopping.
David Nath, Partner, Head of Hospitality CEE & SEE, Cushman & Wakefield: “After a four-year pause, the heart of the former InterContinental Hotel will begin to beat again, now under the management of the luxury brand Fairmont Hotels & Resorts, part of the global Accor Hotels & Resorts chain which has one of the largest databases of loyal clients, currently with over 70mil guests registered worldwide. Once the hotel is stabilized, we suppose over 150 thousand guests a year will visit, expecting perfect and luxurious service offer. This should have a significant impact on the transformation of the hotel’s immediate surroundings, including retail brands and restaurant offerings.”
Read Cushman & Wakefield’s European Luxury Retail Report 2024 to find out more.
