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Luxury Brands Target US AI Super-Rich Amid Global Slowdown
🇸🇦 Saudi Arabia /Economy & Trade

Luxury Brands Target US AI Super-Rich Amid Global Slowdown

From Asharq Al-Awsat · () English

Translated from English, summarized and contextualized by DistantNews.

At a glance

News Sources not specified Context piece
  • Luxury brands are increasing their presence in the United States to attract wealthy consumers benefiting from the AI boom.
  • This strategy aims to offset weak consumer confidence globally and challenges in the Chinese market.
  • The US luxury market shows resilience, with brands investing in new stores beyond major cities to tap into this growing wealth base.

European luxury brands are intensifying their focus on the United States, launching a wave of new stores and fashion shows. Their goal is to capture a new demographic of wealthy shoppers enriched by the artificial intelligence and tech boom. This strategic shift aims to counterbalance sluggish consumer confidence in other global markets and address difficulties in China, a key growth driver for two decades now grappling with deflation and a property crisis.

The US high-end consumer has proven remarkably resilient compared to those in Europe, according to Marcus Morris-Eyton, a portfolio manager at AllianceBernstein in London. He attributes this sustained spending power to the ongoing AI rally and robust wage growth within this affluent segment.

The US high-end consumer has been much more resilient than we are seeing elsewhere, especially in Europe.

— Marcus Morris-EytonPortfolio manager at AllianceBernstein in London, commenting on US consumer resilience.

Major luxury players like LVMH, Moncler, and Gucci are actively responding to this trend. Dior and Gucci recently showcased their cruise collections in the US, while Italian brand Zegna is set to present its Summer 2027 collection in Los Angeles. North America led global luxury store openings for the first time last year, accounting for approximately 27% of new establishments, surpassing Europe's 26% and China's 19%, according to a report by real estate firm Savills. Globally, new luxury store openings have fallen to their lowest point since 2020.

Real estate firm Savills notes that the US still has fewer luxury stores relative to its super-rich population compared to China. "Many brands still view the US as unpenetrated relative to the scale of its wealth base," said Todd Siegel, president of US retail at Savills. This investment extends beyond major coastal cities, targeting second-tier locations where high-net-worth individuals are relocating, often drawn by lower tax rates. Moncler, for example, is opening most of its new stores in the US this year, including a flagship in Aspen and its largest global store on New York's Fifth Avenue, alongside new locations in California and Dallas. Hermes has also expanded its US presence with new stores in Nashville and Scottsdale, with further openings planned in the Chicago area and Brooklyn.

Many brands still view the US as unpenetrated ⁠relative to the scale of its wealth base.

— Todd SiegelChicago-based president of US retail at real estate firm Savills, discussing the US market's potential.
DistantNews Editorial

Originally published by Asharq Al-Awsat in English. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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