Store portfolios relative to global HNWI populations peaked in 2016 (see figure 03) and have since contracted to reach 100 stores per million HNWI’s. This contraction is in response to the 8% annual growth in the world’s HNWI population over the last 10 years. This disparity in growth is more pronounced in China, where HNWI populations have expanded by an average of 27% per annum against store expansion of 6% per annum. A key enabler of footprint expansion in China has been the new retail development that has taken place in the country.

All of this has culminated in a situation where China, despite seeing falling store provision relative to its HNWI population, is better supplied compared to larger, more mature markets such as the US. Based on this example, China has 109 stores per million HNWI, double the 56 in the US (see figure 04). No doubt a sizeable store presence would have had a significant impact on like-for-like comparisons as demand and spend started to slow in China. For some brands, a relative ‘over exposure’ through their store network may have dented consumer perceptions of exclusivity, feeding through to sales performance.

But we are not looking at an over supply and there’s still growth potential in China over the longer term. Relatively larger store footprints in China, subject to wider market conditions, have been historically more supportable from a margin perspective due to lower operational store costs (property and staff costs). This was a feature that drove store expansion in China’s second and third-tier cities in the immediate aftermath of the pandemic. But we are not looking at an over supply and there’s still growth potential in China over the longer term. Relatively larger store footprints in China, subject to wider market conditions, have been historically more supportable from a margin perspective due to lower operational store costs (property and staff costs). This was a feature that drove store expansion in China’s second and third-tier cities in the immediate aftermath of the pandemic.

Whether there is potential to expand store portfolios is not the question. The question is, what will future delivery will look like? To date, the strategy has been largely global – delivering new stores across a range of markets that are relatively similar. Larger brands have been increasingly looking to their stores in key markets to better connect with customers by incorporating cultural and experiential aspects, alongside amenities for their VIP customers. The next stage of that evolution will be shaped by current learnings. As Bain articulates, a return to the foundational pillars of luxury, which is rooted in creativity, craftsmanship and scarcity, but with hyper-local sensibilities.

What does this look like? Well, it’s more than just bigger, architecturally unique and experience-led spaces. It’s the creation of spaces and experiences that embody the brand. It’s a strategy that needs to be reflected across product development and the supply chain. For example, creation of marketspecific products that keep customers engaged, giving them a reason to visit brand stores wherever they are in the world, delivering true and unique destinations. Key to this will be customer service – which, judging by a recent BoF and McKinsey survey, has worsened. Securing talent that can embody the brand and connect with customers is perhaps the new battleground.

BoF & McKinsey, 2025. State of Fashion: luxury. Consumers were asked whether they thought the in-store luxury experience had got better, worse of stayed the same over the last few years; the net balance of +15% said that it had worsened.