Finance

Luxury consultant Michal Kurtis notes that as these vacation spots become more accessible through affordable accommodation options, the retail landscape adapts. Shoppers are keen on acquiring items that carry a story linked to their holiday. This explains the appeal of buying Chanel in Paris, even if the same product is available elsewhere. There is an undeniable charm in associating a purchase with a Riviera adventure, rather than a mundane shopping trip.

Accessible luxury brands, typically priced under $1,000, are gaining traction as the cost of traditional high-end items continues to rise. Many of these brands are leveraging the "Euro summer" phenomenon by opening temporary stores in prime locations. This allows them to gauge demand and refine their strategies without the long-term commitment of traditional real estate. Conversely, brands like Same Swim and Alo are investing in permanent retail spaces, confident that the vacation spending habits of their clientele will justify the expenditure.

Shea Marie, co-founder and designer of Same Swim, which is launching permanent boutiques in Capri and Saint-Tropez, highlights that these destinations offer customers the freedom to shop more extensively. This includes purchasing multiple items or curating an entire vacation wardrobe, especially when competing brands operate at ultra-luxury price points.

However, securing retail space in these sought-after locations is challenging, and logistics can be intricate. Other brands are exploring alternative ways to immerse themselves in the "la dolce vita" experience without formal lease agreements. Staud, for instance, collaborated with the renowned Positano restaurant Da Adolfo, marking the occasion with an influencer trip to the Amalfi Coast. For those unable to attend, the brand extended the collaboration to its U.S. stores, offering a taste of Europe domestically.

Despite many brands establishing their first permanent stores in these areas, the success of their previous pop-ups and promotional trips indicates a strong market for accessible luxury. Marie from Same Swim recalls consistent queues at their Saint-Tropez pop-up last year, anticipating continued demand. She observes that even affluent shoppers are looking for a stylish vacation wardrobe that doesn't completely drain their finances.

For Brazilian ready-to-wear label Farm Rio, coastal hotspots such as Capri, Ibiza, Saint-Tropez, and Marbella are ideal choices. These locations not only align with the brand's vibrant aesthetic but also represent key growth markets. Fabio Barreto, CEO of Farm Rio, states that these expansions are strategically linked to regions showing significant brand recognition and increasing consumer engagement, particularly in Spain. He points to successful past pop-ups in Mykonos, Saint-Tropez, and the Hamptons as indicators of this year's potential. These experiences generated strong engagement from both local and international consumers, not just in sales but also in brand awareness, social media presence, and emotional connection. This current wave of expansion will guide the brand's long-term retail strategy, similar to how a successful temporary run led to their permanent Venice Beach store in Los Angeles.

Jasmin Larian Hekmat, founder of Cult Gaia, adopts a similar approach with her pop-ups in Cannes and Ibiza. She emphasizes that while data is valuable, she remains open to unexpected outcomes. She also prefers to wait for the perfect space, allowing her to carefully plan expansion while still achieving growth. She notes the difficulty in securing prime retail spots on these coastal thoroughfares but actively monitors opportunities while overseeing her temporary ventures.

Given the seasonal nature of these destinations, pop-up models, either standalone or in partnership with retailers or beach clubs, often present a safer option for many brands compared to permanent stores. However, the appeal of securing a foothold on a prestigious shopping street and attracting a high-caliber clientele is a powerful motivator for others to make a long-term commitment. Kurtis explains that storefronts in these locations not only boost brand visibility but also position brands alongside established luxury players. For a contemporary brand to open in Saint-Tropez, it signals an understanding of the local culture and aesthetic, making it seem more relevant and fashionable to aspiring consumers. Nevertheless, this strategy is not feasible for all contemporary brands due to the high initial costs, ranging from property acquisition to shipping. Brands must also ensure their aesthetic resonates with the Riviera lifestyle if they expect customers to make purchases abroad.

For some founders, the pop-up strategy can entail high effort with limited returns. Same Swim's Marie shared that after successful pop-ups in New York City, Florida, and Saint-Tropez, they concluded that this model was not ideal. Upon closing these temporary locations, Marie realized that the investment could have yielded greater returns had they maintained a longer presence. With accumulated data and a clear understanding of demand, they now focus on long-term strategic potential, customer feedback, and how naturally the brand integrates into the chosen destination. Setting up permanent stores in places like Capri and Saint-Tropez has proven more challenging than anticipated. Marie notes that the logistical complexities of international expansion are amplified in these coastal areas, encompassing language barriers and differing timelines for collaborating with local contractors.

Farm Rio experiences similar challenges. Barreto describes the difficulty of managing temporary projects across multiple countries, each with distinct regulations, schedules, logistics, and retail dynamics, while striving to maintain a consistent brand experience. To alleviate some of the logistical strain, their Ibiza store is located within the Jondal beach club, simplifying setup and allowing the team to focus primarily on merchandising. While these permanent stores are designed to be profitable, founders also emphasize their significant marketing potential. A prolonged presence in Europe during the summer offers a greater impact than brief influencer trips or pop-ups.

Barreto highlights that beyond sales, these stores serve as strategic tools for enhancing brand recognition and fostering long-term market connections. They provide insights into consumer engagement across different regions, local audience reception to the brand's positioning, and how Farm Rio's universe translates culturally, thereby solidifying its status as a global lifestyle brand. Ideally, brands targeting these scenic locations will offer exclusive collections or items specifically designed for each spot, ensuring a curated and unique assortment, as suggested by Kurtis. Farm Rio is adopting this approach, with each store featuring exclusive souvenir products under its "Feeling Rio" concept, including scarves, tote bags, hats, and T-shirts tailored for each project. Given the relatively affordable price point of these brands, these distinctive, souvenir-like items are likely to attract customers seeking holiday mementos. Increased brand awareness typically leads to higher sales, and the longer these brands remain in these locations, the greater the benefit. As Kurtis observes, people enjoy shopping while on vacation, viewing it as an emotionally driven activity rather than a necessity. The playful sentiment that money feels like "Monopoly money" during a holiday applies to spending abroad, whether on a unique designer bag or a whimsical clutch.