Luxury retail 2026: quality over quantity

Luxury retailers get more strategic with store openings
 

Luxury retail in the US enters the second half of 2026 at an inflection point. After leasing activity surged past 500,000 square feet in 2025, openings have slowed sharply. H1 2026 luxury openings totaled 123,000 square feet compared to 227,000 square feet in H1 2025 – a 46% year-over-year decline.

Bain's global research lines up with what we see on the ground: monobrand openings are running 15% to 20% below 2022 levels while average flagship size has grown more than 30% (Bain & Company, Finding a New Longevity for Luxury). Deloitte’s Global Powers of Luxury 2026 report echoes this trend, showing that 39.3% of luxury executives are actively planning store network optimization, prioritizing a smaller number of higher-quality locations over raw door count.

Here is what our luxury store opening tracker recorded between July 2025 and July 2026, and what it changes for anyone leasing, underwriting, or advising in this space.

US luxury leasing history since 2023 has been uneven. Luxury leasing has never moved in a straight line. US activity totaled 475,210 square feet in 2023, dipped to 407,396 in 2024, then surged past 510,000 in 2025. The first half of 2026 came in at 123,334 square feet, well behind last year's pace.

Quarterly data makes the pattern clearer. Activity consistently spikes in the back half of the year as brands time their biggest debuts to catch holiday traffic and close out capital plans before the fiscal year turns. A soft first half has preceded a strong finish more than once in this dataset, making it possible for the remainder of 2026 to set a stronger pace than what we’re seeing so far.

Openings split almost evenly by property type. Malls took 51.6% of US openings, street retail 46.3%, and hospitality the remaining 2.1%. Average size tells a different story entirely. Street retail stores averaged 5,850 square feet against 3,144 in malls and 2,637 in hospitality settings.

That near two-to-one gap comes from a small number of outsized flagships anchoring corridors in New York and Los Angeles. Three of the five US openings above 10,000 square feet landed on the street in those two markets. Prime corridors captured 30 of the 45 street retail openings tracked, which means street activity concentrates heavily in a handful of established addresses rather than spreading across secondary retail streets.

The size distribution is more lopsided than the flagship headlines suggest. Stores under 2,500 square feet made up 48.4% of US openings. Another 29.5% fell between 2,500 and 5,000 square feet, 16.8% between 5,000 and 10,000, and only 5.3% cleared 10,000 square feet.

Malls account for 61% of every opening under 2,500 square feet, and jewelry and watch stores make up 43.5% of that smallest tier. These are compact, high-value boxes slotting into existing luxury wings.

Miami's Design District posted eight openings, more than any other prime corridor in the country, and its tenant roster (Rolex, Bvlgari and Vacheron) confirms it as the clearest jewelry and watch cluster in the US outside a mall setting.

Madison Avenue tells the opposite story. It leads every corridor in the country on total square footage, driven largely by Dior's 52,000 square foot flagship, on a smaller number of openings. The Beverly Hills Triangle runs a similar profile at smaller scale, with three openings averaging roughly 19,700 square feet each, which reinforces Los Angeles as a flagship-format market rather than a high-frequency one.

At the other end, Newbury Street, Michigan Avenue and Fulton Market each registered a single opening. Luxury expansion in 2026 stayed weighted toward a small set of proven corridors.

The single largest number in the entire dataset belongs to Vancouver, with 30 luxury openings – enough to top the North American market list ahead of New York. This project highlights a case of mall repositioning rather than evidence that Vancouver has overtaken Manhattan on sustained luxury demand.

That figure comes almost entirely from one project. Oakridge Park, a joint venture between QuadReal Property Group and Westbank, opened in mid-2026 with more than 30 luxury and luxury-lite tenants debuting simultaneously. The project repositioned a high-performing suburban mall into a dense mixed-use complex with two retail floors, luxury residential towers, Class A office space, a nine-acre public park and a community centre, all sitting directly atop a Canada Line SkyTrain station 20 minutes from the airport.

The tenant roster is genuinely significant. Chaumet opened its first North American standalone there. Jacob & Co. opened its first Canadian standalone. Loewe, Miu Miu and Acne Studios all made Western Canadian debuts, alongside Rolex, Bvlgari, Tiffany & Co., and others.

Vancouver's outlier status should not obscure what is happening across Canada more broadly. Luxury accounted for 43% of new fashion store opening announcements in major Canadian markets in the first half of 2026, ahead of midrange at 31%, premium at 13% and value at 12%. Luxury brands are driving Canadian fashion real estate absorption this year, and Oakridge Park is the largest single reason why.

Toronto added five openings and Montreal two. Oakridge now stands as one of Canada's most significant luxury retail clusters, functioning as Western Canada's counterpart to Toronto's Yorkdale and Montreal's recently completed Royalmount. That gives Canada three genuine luxury mall destinations spread across three metros, which is a meaningful change from a market that was effectively Yorkdale and Bloor Street a decade ago.

Independent and family-controlled houses (brands whose majority voting control rests with the founder, founding family, or a foundation established by them, rather than a luxury group or financial sponsor) drove 46% of all tracked openings across the US and Canada, more than any conglomerate, averaging around 3,200 square feet per store.

LVMH and Richemont together accounted for roughly 30% of openings, and their footprints diverge sharply. LVMH stores averaged nearly 9,000 square feet, close to three times Richemont's, reflecting Dior and Tiffany flagship bets in New York and California. Richemont's activity skews smaller, leans jewelry and watch heavy in line with its Maisons segmentation, and spreads across a wider set of markets. Kering and Zegna each accounted for under 5% of openings, consistent with more conservative real estate postures amid category headwinds.

Real estate strategy this disciplined usually reflects something happening on the demand side, and it does here. The global luxury customer base fell from roughly 400 million buyers in 2022 to 330 million in 2025, back to 2013 levels, as around 20 million mostly aspirational shoppers exited a market strained by years of price increases. Revenue, however, held steady because the departing customers were never the ones driving it. Shoppers spending more than €20,000 a year kept spending and now represent 46% of all luxury sales, up from 30% in 2019. (Bain & Company, Finding a New Longevity for Luxury).

Revenue held up better than the headcount because the departing customers were never the ones driving it. Shoppers spending more than €20,000 a year kept spending and now represent 46% of all luxury sales, up from 30% in 2019. A market serving a smaller, wealthier, more demanding client base does not need the same number of doors. It needs better ones, in the right places, positioned to deliver an unmatched level of service.

Bain estimates luxury experiences grew about 3% in 2025 while luxury products declined about 1%, and experiences have been the only segment adding to overall luxury spending since 2023 (Bain & Company and Fondazione Altagamma, Finding a New Longevity for Luxury).

That changes the space requirement in concrete ways. New flagships are being programmed with cafés and dining rooms, gallery and exhibition space, room for traveling pop-ups, and installations built to be photographed. Watch and jewelry houses run a private version of the same play through invitation-only ateliers, masterclasses and gallery-style previews (Deloitte, Global Powers of Luxury Goods 2026).

For landlords, this is the practical reason average sizes are climbing. A brand adding food and beverage, event space and client suites needs square footage that a pure-retail underwriting model would flag as excessive. It also needs different infrastructure, from kitchen venting to separate entrances to floor loading. Corridors and centers that can accommodate that specification will keep winning flagship deals. Those that cannot will compete for the compact formats instead.