PARIS, July 15 (R) – American tourist Shawna Wilson says she bought four dresses at high-end LVMH-owned La Samaritaine department store in Paris, tempted by the prices when the euro died reached parity with the US dollar.
The euro fell below $1 on Wednesday for the first time in two decades amid fears that soaring energy prices triggered by the Ukraine conflict could plunge the European Union into a prolonged economic crisis. Continue reading
“It’s like it’s on sale here,” said Wilson, 49, of Colorado, whose purchases included two dresses for her daughter. “Because the euro and the dollar are about the same, it definitely encourages us to spend.”
The weak euro is a big draw for tourists, particularly Americans, who analysts at Barclays said were a key growth driver for Europe’s luxury goods sector in the second quarter.
The strong dollar against the euro helped push tourism spending in Europe four-fold year on year in June, with spending by Americans accelerating, analysts at UBS said, citing data from VAT refund provider Planet.
The luxury sector has bounced back quickly from the pandemic, as people rushed to spend the money saved during the lockdown – and bought treats when socializing resumed.
But sales in China, the world’s largest luxury goods market, have slumped this year as a new wave of strict COVID-19 lockdowns has closed stores, curtailed demand and also meant Chinese tourists in Europe are less willing to spend. Continue reading
So as Americans fill transatlantic flights, their eagerness to capitalize on the weak euro is helping to replace business lost to the lack of Chinese visitors, who were the main source of luxury sales growth in Europe before the pandemic.
Luxury goods companies Richemont (CFR.S) and Burberry reported higher sales in Europe on Friday, which helped offset a more than 30% decline in China. Continue reading
France has benefited the most from the flood of tourists.
Sales to tourists in France rose in June to just 11.3% below 2019 levels, a positive sign for French luxury labels with heavy exposure to their home market, UBS analysts said.
The Dior logo is seen on a renovated building of luxury brand Dior on Champs-Elysees avenue in Paris, France, July 13, 2022. R/Rali Benallou NO RESALES. NO ARCHIVES
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American tourists crowded Paris’s Avenue Montaigne this week, browsing the luxury boutiques, which include designer names like Louis Vuitton, Chanel and Gucci.
Cheryl Penn, 70, a real estate agent from Delray Beach, Fla., had already bought a skirt and stocked up on baby clothes for her granddaughter.
“We just got onto the avenue, so we’ve just started our shopping spree,” Penn said.
“I like that the euro and the dollar are the same, so I know exactly what I’m spending,” she said.
Jennifer Groner, a TikTok influencer, went on a shopping spree in Paris in April when the euro was under pressure against the dollar.
“I’ve never seen anything like it in terms of price savings,” she told R, estimating that she bought a Birkin bag from Hermes in Paris for $4,000 less than it would have cost it in the US, and something more paid $9,000, thanks in part to a sales tax refund.
“You can travel to Europe, enjoy the culture, and buy a bag at the same time,” said Groner, who also bought handbags and accessories from Prada, Dior, Louis Vuitton, and Chanel for a total savings of $8,000 compared to US prices , based on their calculations.
Monika Arora, founder of pursebop.com, a news and information website for luxury brands, said she believes brands will eventually “harmonize” prices.
“They’ve done that many times,” she said.
Chanel told R in May that it could make further price increases in July to reflect currency fluctuations – particularly the weakness of the euro – and inflation. Continue reading
Paris’s appeal remains strong for American shoppers, even though New York’s high-end shopping streets are teeming with luxury European designer brands.
“More than ever, so many of my friends are taking little weekend trips to Paris and other places and shopping while they’re there – because that’s what you do when you’re in Paris,” said Jennifer Tumpowski outside the Gucci flagship store at the New York’s Fifth Avenue.
Reporting by Lea Guedj, Doyinsola Oladipo, Gigi Zamora and Mimosa Spencer. Editing by Jane Merriman
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