In a shift, luxury retailers are fixing up their old stores rather than opening new ones, reports Christina Passariello in The Wall Street Journal (9/30/13). "For a decade, it seemed that brands such as Vuitton, Gucci, Ferragamo and Hermes couldn’t open new stores fast enough … But those brands and many others have now covered most of the globe, including such far-flung locales as Mongolia … The refurbishment is part of a painful maturing of the luxury-goods industry. Executives worry that their stores have become so ubiquitous that consumers have lost the thrill of shopping in them."
So, "luxury houses … are refurbishing and expanding their old retail spaces, jazzing them up to create a sense of novelty and give shoppers a new reason to pass through their doors." Whether this will result in growth is unclear, because "luxury-goods companies don’t disclose same-store sales growth, a metric showing how much sales grew at stores open at least a year." Nor does it mean that the companies aren’t adding new stores – they are, just not as quickly as in the past. "Only Prada SpA is rampantly opening new locations" mainly because "it didn’t have the funds to invest several years ago."
Michele Norsa, chief executive of Salvatore Ferragamo, says the focus now is on increasing the size of their stores, rather than the number of them. He says the goal is to "increase the selling space and use less storage" to maximize sales. He also "moved the shoe department, which had been in a long room, to where the handbags were once located because clients look at shoes longer than bags." But he says the re-tailoring of his stores versus opening new ones is not about saving costs, noting that "renovations in old cities can be more costly than building a new space in a new city."