Fragrance brand House of Creed just finished expanding its presence at the Forum Shops at Caesars, and executives already have their sights on a second outpost along the Las Vegas Strip.
When you’re at one side of the Strip — say, at Aria — “the likelihood of you shopping and experiencing Creed is very unlikely,” said Thomas Saujet, co-founder and president of International Cosmetics & Perfumes, which manages Creed’s North American operations. “You’re not going to come to Forum, and if you’re at the Forum you’re not going (to Aria) as well, so I think there’s just so much retail opportunity.”
Creed, which celebrated the grand opening of its expansion in late January, and a number of other luxury labels are itching to expand their retail presence in Las Vegas as big-spending tourists and millennials propel the luxury retail market.
At your service
The global luxury market is expected to grow at about 4 percent a year and reach roughly $1.5 trillion by 2025, according to a 2019 report by Boston Consulting Group.
Representatives of the Forum Shops, the Grand Canal Shoppes at The Venetian and Wynn Plaza all cited the high volume of tourists, particularly international shoppers, as the biggest driver of luxury retail’s growth along the Strip.
Janet Lafevre, senior marketing manager at the Grand Canal Shoppes, said more than 90 percent of the mall’s shoppers are tourists.
“Our luxury retailers really thrive with the international customer that comes in, and that’s a real focus for us,” she said.
International visitors spend significantly more on shopping in Las Vegas than other tourists. In 2018, the average foreign visitor spent $296.39 on shopping during their stay, while the average Southern California visitor spent $138.01 and the average visitor from elsewhere in the U.S. spent $206.34, according to the Las Vegas Convention and Visitors Authority’s latest visitor profile.
Also pushing the trend are millennials — those born between 1981 and 1996 — who are expected to make up half of the $1.5 trillion luxury market, according to Boston Consulting Group. Millennials are having such an impact that brands like Louis Vuitton, Gucci and Chanel are adapting to their preferences by offering things like luxury streetwear apparel.
Frank Visconti, senior vice president of retail at Wynn Las Vegas, said the opening of Off-White — a luxury streetwear brand founded by Virgil Abloh, Louis Vuitton’s menswear artistic director — last summer was Wynn Plaza’s way of catering to that fashion-forward crowd willing to spend over $200 for a graphic T-shirt.
“People dress differently than they did 20 years ago,” Visconti said. “They’ll carry a Chanel bag and wear sneakers, and men will wear Kiton tuxedos with sneakers.”
‘Luxurious fish tank’
The luxury retail market is so strong that, in order to expand, Creed had to wait two years for a space to became available, said Maureen Crampton, director of marketing and business development at Forum Shops.
Luis Cavallo, director of stores for Creed, said its store was bursting at the seams in its former home in front of Tourneau, which he described as a “luxurious fish tank.”
Crampton said luxury is a significant contributor to the success of the Forum Shops, and many brands recently took steps to meet increasing demand.
Gucci, near The Fountain of the Gods, has expanded by nearly 2,000 square feet, unveiling a renovated 6,217-square-foot store last year.
Neighboring retailer Louis Vuitton stretched out by spinning off its men’s offerings into a separate 2,702-square-foot store several steps away. It used the space made available at its 6,056-square-foot location to create a dedicated women’s store.
Balenciaga more than tripled its space when it unveiled a re-imagined store late last year, growing to 4,315 square feet.
Visconti said he simply can’t satisfy demand at Wynn Plaza.
“I have 60 stores here, and I’m probably not exaggerating that 50 of them would probably like more space,” he said. “It’s rare that someone leaves. … When opportunities come up, they’re pounced on.”
Chanel got lucky when its next-door neighbor vacated, Visconti said. Now the Parisian brand is undergoing an expansion and is expected to finish its remodeling at the end of this year, and Hermès will triple its size when it moves into a new space this year.
Balenciaga, which currently has stores at the Forum Shops and CityCenter’s Shops at Crystals, is opening a Wynn Plaza location by June.
Visitors to the Shops at Crystals can also expect to see some changes, according to Monique Clements, the mall’s director of marketing and business development.
“While we aren’t ready to make any official announcements at this time, we do have (over) 15 stores remodeling, right-sizing or relocating to new locations in the next 18 months,” Clements said in an email.
Saujet said the roughly four-mile Strip likely makes Las Vegas one of the only cities other than New York where luxury retailers can open multiple locations.
“If Chanel can have three stores in Vegas (when) they’re completely not the type of brand that oversaturates the market, same thing with Hermès, that means there is definitely room for more than just one boutique — no question,” Saujet said of Creed’s expansion.
Cathy Enderwood of CBRE pointed out rents are likely much cheaper for luxury brands on the Strip than they are in New York. It’s unclear what the rates are as hotel-casinos handle leasing internally, but she said they’re rumored to be $250 to $300 per square foot, whereas brands can expect to pay well over $1,000 per square foot in New York.
“They probably feel in Las Vegas they’re getting some value and incredible traffic from all over the world,” Enderwood said. “Plus, all these brands want to have their physical experience in the store complement the digital so it brings brand awareness.”
Lafevre of the Grand Canal Shoppes noted luxury retailers know how many of their stores a market can support.
“Luxury is typically not looking for department-size stores,” she said. “They’re very particular. It’s a lot of courting, (and) we have several luxury tenants that we’re trying to get over the lease line.”
Visconti admitted he does worry about the day-to-day sales volume, but he quickly puts things in context when thinking about retail giants like LVMH, whose portfolio includes Louis Vuitton, Christian Dior and Loewe.
“Bernard Arnault, chairman of LVMH Corp., vacillates between first and second richest man in the world, and his business is luxury retail,” he said. “He just acquired Tiffany & Co., so when I start to worry about yesterday’s sales, I think to myself, ‘Well … he’s still expanding, so I think I’m OK.’ ”
The Las Vegas Review-Journal is owned by the family of Las Vegas Sands Corp. Chairman and CEO Sheldon Adelson. Las Vegas Sands operates The Venetian.