LVMH Is Creating Luxury Cityscapes Around Its Designer Stores

Louis Vuitton Moët Hennessy (LVMH), the luxury brand known for its iconic names in fashion, wines, and spirits, is transforming older neighborhoods worldwide into upscale plazas and shopping hubs.

The Wall Street Journal reported that the parent company of brands such as Louis Vuitton, Fendi, and Dior and equity firm L Catterton is investing billions in physical retail by acquiring dated shopping centers, hotels, and warehouses and revamping them into multipurpose complexes based on its brands.

The report highlights that many of these efforts include acquiring real estate in historic neighborhoods, such as the Pont Neuf area in Paris. Notably, this location has seen legal challenges directed at LVMH from historians concerned about preserving the integrity of the 150-year-old Samaritaine department store. LVMH is collaborating with renowned architects like Frank Gehry to develop upscale neighborhoods by repurposing these spaces into shopping centers.

Michael Burke, head of LVMH Fashion Group, told the WSJ, “We’re creating a city.”

“We take something that does not exist and when we’re done a city center has been created with the residential, retail, and cultural aspects to it.” He added, “Most of our brands were brands that had fallen on hard times. Just like this real estate, we bought it because it was derelict. In ruins.” 

The “derelict” real estate includes locations like Miami’s Design District, where the company gave 30 acres of warehouses and unused office buildings a makeover into a high-end area consisting of museums, offices, and a retail center. Across 14 years, LVMH and a local developer acquired multiple blocks within the warehouse district. According to a blog post by the Miami Design District, investment management firm JLL said that rental costs for retail spaces in the area have shot up by 200% since 2019.

Burke revealed to the WSJ that the company entered the real estate market in 2010 after persuading CEO Bernard Arnault to rejuvenate Miami’s warehouse district. As a result, they have broadened their presence to multiple global locations, such as Paris and Montreal. The company allocated $2.1 billion last year toward acquiring properties in Paris before the Olympic games kick off.