PARIS, July 15 (Reuters) – US tourist Shawna Wilson says she has been splashed in four suits at LVMH La Samaritaine’s high-end department store in Paris, tempted by prices when the euro reached parity with the United States dollar.
The euro fell below $ 1 on Wednesday for the first time in two decades amid fears that rising energy prices caused by the Ukraine conflict could bring the European Union into a protracted economic crisis. Read more
“It’s like it’s for sale here,” said Wilson, 49, of Colorado, whose purchases included two dresses for her daughter. “Because the euro and the dollar are almost the same, it certainly encourages us to spend.”
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According to Barclays analysts, the weak euro is a major attraction for tourists, especially Americans, who are marked as a key growth engine for the European luxury goods sector during the second quarter.
The strength of the dollar against the euro helped quadruple tourism spending in Europe in June compared to last year, with an acceleration in US spending, UBS analysts said, citing supplier data Planeta VAT refund.
The luxury sector has recovered quickly from the pandemic, as people rushed to spend the money saved during confinements: buying sweets as socialization resumes.
But sales in China, the world’s largest luxury goods market, have plummeted this year as a new wave of strict locks on COVID-19 closed stores, reduced demand and also meant less Chinese tourists spending a lot in Europe. Read more
Thus, as Americans fill transatlantic flights, their eagerness to take advantage of the weak euro is helping to replace lost business as a result of the lack of Chinese visitors, who were the main source of growth. of luxury sales in Europe before the pandemic.
Luxury goods companies Richemont (CFR.S) and Burberry on Friday recorded more sales in Europe, which helped offset a drop of more than 30% in China. Read more
France has benefited most from the recreation of tourists.
Sales to tourists in France in June rose to just 11.3% below 2019 levels, a positive sign for French luxury brands that have a large exposure to their home market, the UBS analysts.
The Dior logo is seen in a building under renovation of the luxury brand Dior on the Avenue des Champs Elysées in Paris, France, July 13, 2022. REUTERS / Rally Benallou NOT FOR SALE. NO FILES
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American tourists were crowded on Paris ’Avenue Montaigne this week, browsing the luxury stores, which include names of designers like Louis Vuitton, Chanel and Gucci.
Cheryl Penn, 70, a real estate agent in Delray Beach, Florida, had already bought a skirt and stocked up on baby clothes for her granddaughter.
“We just got to the avenue, so we just started our shopping season,” Penn said.
“I like the euro and the dollar to be the same, so I know exactly what I’m spending,” he said.
Jennifer Groner, a TikTok influencer, went shopping in Paris in April when the euro was under pressure against the dollar.
“I’ve never seen anything like this in terms of price savings,” he told Reuters, estimating that he grabbed a Birkin bag from Hermes in Paris for $ 4,000 less than it would have cost him in the United States, paying little month. $ 9,000, thanks also to the VAT refund.
“You can travel to Europe, enjoy the culture but at the same time buy a bag,” said Groner, who also bought bags and accessories from Prada, Dior, Louis Vuitton and Chanel, with an overall saving of $ 8,000 compared to US prices, according to his 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 it many times before,” he said.
Chanel told Reuters in May that it could implement further price increases in July to take into account currency fluctuations, especially the weakness of the euro, and inflation. Read more
The attraction of Paris remains strong for American shoppers, even though New York’s high-end shopping streets are full of luxury European design brands.
“Many of my friends more than ever are making small weekend trips to Paris and other places and shopping while they’re there, because that’s what you do while you’re in Paris,” Jennifer Tumpowski told the flagship store by Gucci. on New York’s Fifth Avenue.
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Report by Lea Guedj, Doyinsola Oladipo, Gigi Zamora and Mimosa Spencer. Edited by Jane Merriman
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