Announced already in March by local media, Hermès is opening a new store in Bucharest in 2025. The directly operated store will be located in a renovated heritage building in the heart of the city, within a prestigious neighbourhood of the city. In Central & Eastern Europe, Hermès operates mono-brand stores in Vienna, Prague and Warsaw. The brand remains absent from Budapest, Belgrade, Sofia and Kyiv.
For Louis Vuitton, the new opening is actually a relocation, the brand having been operating a 130 sqm boutique since 2008 at the shopping Gallery of JW Marriott Bucharest. The new location of Louis Vuitton in Bucharest is on Calea Victoriei, spreading over 250 sqm and with direct access from the street. With the relocation, Louis Vuitton will be expanding its offering to include ready-to-wear, which had not been part of the previous boutique. The store remains directly operated by Louis Vuitton and it is estimated to open November 2024.
Romania’s luxury market had been declining already before the pandemic, with cars and real estate being the only two luxury sectors less affected. A decrease in purchasing power, shopping abroad and the lack of suitable luxury real estate infrastructure – remain the main factors for the downfall. Gucci, Zegna, Burberry and Emporio Armani are among the luxury brands which shut down mono-brand stores in Bucharest in the past 3 years (all operated in franchising). The potential of Romania’s luxury market remains limited and it will take time for the retail infrastructure to offer a true luxury experience.
Budapest and Prague have also been impacted by the pandemic, especially the steep decline in wealthy travellers from the U.S. and Asia, particularly from South Korea and China. Unlike Romania, local nationals in Hungary and Czech Republic are less driven and motivated to purchase luxury branded fashion goods, with a much lower show-off factor. Dior is one of the prominent major luxury brands which shut down its store in Budapest. Chanel, Hermes and Prada remain absent from Budapest.
The profile of local wealthy consumers in Poland is quite similar to the ones in Hungary and Czech Republic, however, a good luxury real estate infrastructure and a large number of relocated wealthy Ukrainians – have been factors for growth. Hermes opened a new mono-brand store in Warsaw 2020 and Dior is expected to open a new mono-brand store in Warsaw at the Vitkac luxury shopping mall. By contrast, luxury hospitality has remained buoyant in Budapest, Prague and Warsaw with several new luxury hotel openings.
Russia’s war on Ukraine, continues to have a major negative impact, all major international luxury brands having had a mono-brand store presence in both countries. Ukraine’s luxury fashion market alone used to be totalling in value that of several countries in Central & Eastern Europe put together.
Oliver Petcu
The Athenaeum in Bucharest, Romania
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