Bernstein: US luxury stores shift toward street locations and new regions as department-store channel continues to shrink

Why are stores still shrinking when US demand is strong?

Bernstein notes that US luxury demand has grown at a mid-single-digit to low-double-digit rate since the pandemic. The Americas accounted for about 30% of global luxury consumption in 2025, but contributed only about 20% of reported revenue for most European luxury companies, indicating differing opportunities for expansion across brands and regions.
Expansion does not, however, mean more stores in every channel. From 2024 to 2026, the total number of US points of sale for 12 brands with comparable data fell from 657 to 641, a decline of 2%; department-store points of sale fell from 151 to 129, down 15%.
Weakness in department stores and shopping malls and declining foot traffic have led to bankruptcies and consolidation, and have also prompted luxury brands to exit some peripheral areas. Bernstein expects consolidation in the wholesale channel to continue.

For the same comparable brands, street-front boutiques increased from 96 in 2024 to 102 in 2026, up 6%; outlet points of sale fell from 45 to 40, down 11%. Brands are adding flagship stores in key districts and coastal hubs while scaling back discount channels.
The number of shopping-mall boutiques edged down from 326 to 324: new openings were roughly offset by closures in weaker malls. Even so, shopping-mall boutiques accounted for 46% and department-store points of sale for 25% of the 1008 US points of sale across all 18 surveyed brands in 2026.
Large regional shopping malls continue to attract luxury brands thanks to their locations and foot traffic, while smaller malls focus more on a curated mix of luxury brands.

Louis Vuitton’s US points of sale fell from 109 in 2024 to 96 in 2026, down 12%; Gucci’s fell from 107 to 100, down 7%. Louis Vuitton’s adjustments included closing some shopping-mall boutiques on the West Coast.
Over the same period, Hermès increased its points of sale from 41 to 45, and Cartier from 28 to 33, growth of 10% and 18%, respectively; both entered new regions. Hermès established a presence in more affluent, less well-served areas such as Nashville and Princeton, showing that opportunities exist beyond traditional coastal hubs.
Bernstein believes that Cartier and Hermès are entering new regions from a lower store base, while Moncler continues to invest in US stores and brand education. These expansions could help sustain their recent growth momentum through 2027.

Bernstein screens potential markets by population, wealth per capita and tourist traffic. It believes luxury stores are clustering in Texas, while Midwestern cities such as Minneapolis and St. Louis may also offer room for growth. Visitor traffic at tourist destinations can support store locations independently of local residents’ wealth.
Meanwhile, approximately 15% to 20% of points of sale outside New York City have another point of sale of the same brand within 500 meters, typically a department-store point of sale near a boutique. Bernstein believes brands can continue to streamline overlapping wholesale channels and concentrate business in existing boutiques.
Part of the recent growth momentum in the US is linked to wealth created by the AI technology boom. Bernstein believes the outlook for this momentum has become more fragile and increasingly depends on the outcome after the 2026 US midterm elections; whether new regions can support growth also varies by brand.