The European luxury retail market continued to strengthen in 2025, demonstrating resilience despite ongoing challenges in the sector. This is according to the latest study by real estate consultancy Cushman & Wakefield, European Luxury Retail, which focuses on the development of Europe’s leading luxury shopping streets.
During 2025, a total of 96 new luxury brand stores opened across 20 of Europe’s most prestigious high streets in 16 cities, representing a year-on-year increase of 13%. The findings confirm that physical stores remain a key pillar of luxury brands’ strategies, with an increasing focus on flagship locations and unique customer experiences.
Fashion and accessories accounted for the largest share of new openings, representing approximately half of total activity. Jewellery and watch brands also maintained solid performance, while the beauty and fragrance segment showed growing momentum, particularly in major European capitals.
While around one-third of new stores were opened by brands from the LVMH, Kering and Richemont groups, as many as 70% of openings were realized by a further 57 brands and brand groups. This development highlights the growing diversity of the market and intensifying competition, with fast-growing and more specialized brands increasingly gaining access to prime locations.
Prague in the Context of European Luxury Retail
Strong demand for prime locations is also evident in the Czech Republic, particularly in Prague, which has long been perceived as an established European luxury retail destination. Pařížská Street consistently ranks among the 20 most expensive shopping streets in the world by rental levels and remains the most expensive retail location in Central and Eastern Europe.
The attractiveness of Pařížská Street for international luxury brands continues to grow, driven by a combination of a strong presence of directly operated brand stores, a unique setting, the increasing strength of local customers, robust tourist demand, and a growing number of luxury hotels and projects in the immediate vicinity. Luxury brands regularly invest in upgrading their existing stores and strive to ensure that their spaces reflect the latest design trends—developing flagship and experiential concepts that go beyond traditional retail formats and reinforce Pařížská Street’s image as a prestigious luxury shopping destination.
Limited Availability of Retail Units
Europe’s prime luxury streets remain severely supply-constrained. In 2025, eight monitored streets recorded zero vacancy, while several other locations reported vacancy rates below five percent. The lack of available space is forcing brands to seek creative solutions, such as expanding into upper floors of buildings or moving into adjacent premium districts.
In Prague, availability in the most prestigious locations has also remained extremely limited over the long term. Pařížská Street continues to show consistently low vacancy, while brand interest is increasingly extending to other central locations, particularly Na Příkopě Street and selected parts of Wenceslas Square.
Marjan Gigov, Luxury Retail Leasing Specialist, Cushman & Wakefield, comments: “Pařížská Street has long been synonymous with scarcity—available units are a rarity. This is precisely why we are now seeing brands respond creatively to limited supply, whether by expanding existing premises or relocating to larger spaces. Projects such as Fairmont Golden Prague and Pařížská 25 are coming at the right time and are creating opportunities that would otherwise hardly exist on this street.”
New Developments Support Further Growth
Further growth of luxury retail in Prague is also supported by new developments and refurbishments in the immediate vicinity of Pařížská Street. A notable example is the recently completed Fairmont Golden Prague project, which has welcomed new stores from MaxMara, Grenardi, Pasquale Bruni, Damiani, La Table, KodlContemporary Gallery, KC Editions, and the exclusive The Macallan Room tasting space.
Later this year, the project will also see the opening of the first Czech store of Ermanno Scervino. The successful hotel refurbishment will be followed by a new building on Miloš Forman Square, designed by ADEPT Architects, which will deliver up to three additional standalone retail units for luxury brands. Across the street, the Pařížská 25 project is also nearing completion, with two new flagship stores set to open this year.
Luxury retail is gradually expanding into adjacent streets within Prague’s historic centre as well, underlining the city’s growing importance as a regional luxury hub. Streets such as Široká, Maiselova, Dušní, Vězeňská and Železná are becoming attractive destinations for brands targeting more niche customer profiles.
Rising Rents Confirm Long-Term Attractiveness
Tight supply conditions continue to be reflected in rental growth. By the end of 2025, rents on luxury high streets were on average 7% higher than in 2018, with several cities reaching historic highs.
Limited availability is also driving rental growth in Prague. Pařížská Street, which represents the Czech Republic in the Main Streets Across the World ranking, ranked 19th globally last year, with annual rents reaching EUR 2,820 per sq m. Rental growth is not limited solely to luxury locations, suggesting a broader recovery in demand for high-quality retail space.
The attractiveness of the Czech market is further underlined by continued interest from new international brands, including luxury players.
Outlook Remains Positive
The study concludes that European luxury retail remains strong and resilient despite a volatile macroeconomic environment. Long-term brand building, strategic investment in physical stores and an increasing emphasis on customer experience continue to play a crucial role. As a result, the outlook for Europe’s leading luxury shopping destinations remains stable through 2026.
Jan Kotrbáček, Partner & Head of Retail Agency for Central and Eastern Europe, Cushman & Wakefield, adds: “Prague is increasingly establishing itself as the dominant luxury retail destination across Central and Eastern Europe. The combination of a strong concentration of directly operated brand stores, the unique setting of Prague’s historic centre, limited availability of prime space, the growing strength of local customers, tourist demand and ambitious development projects creates ideal conditions for the entry of additional global brands. The record number of six luxury brand openings on Pařížská Street is the best proof of this.”
These trends are clearly reflected in the Prague retail market, where a shift towards larger, modernised and experience-driven stores is evident. On Pařížská Street, several retail units are currently undergoing this transformation. Brands such as Cartier and Brunello Cucinelli have expanded their existing stores, while Patek Philippe has relocated to a larger space. Rolex and Longchamp are refurbishing their stores in line with the latest global retail concepts.
Developments in the Czech market therefore not only mirror broader European luxury retail trends but also confirm Prague’s long-term attractiveness as a key destination for luxury brands at both regional and European levels.
