Luxury retailers were riding high a year ago, having enjoyed several years of growth following the COVID-19 pandemic. Today? New headwinds have hit this slice of the retail sector, most notably economic uncertainty and concerns over tariffs.

What do these challenges mean? That’s not yet determined. JLL in its U.S. luxury retail report, released earlier this week, said that while some luxury brands have reported falling revenues, economic concerns have not yet led to a significant decline in luxury store openings.

According to JLL’s report, luxury retailers are opening new locations at a faster pace than they did in the first half of 2024. In the first six months of this year, newly opened luxury square footage jumped by 65.1% when compared to the same period a year ago.

However, the last quarter of 2024 was even more active. JLL said that luxury openings in the fourth quarter of last year totaled 195,563 square feet, the highest quarterly total that JLL has ever recorded in the luxury retail market.

And so far this year? In the first quarter of 2025, retailers opened 146,888 square feet of new luxury retail space across the United States, JLL said. In the second quarter of this year, they opened 79,625 square feet of new luxury space. That’s a total of 226,513 square feet of new luxury openings in the first half of this year.

Challenges do loom, though. JLL reported that Capri Holdings anticipates an $85 million increase in cost of goods sold for fiscal year 2026 because of tariffs, while Tapestry’s Kate Space brand is impacted by the 20% Southeast Asian import tariffs, something that is prompting the retailer to reduce its handbag styles by 30%. The company is projecting a total $160 million tariff-related cost for fiscal year 2026.

At the same time, LVMH says that it is increasing local production in the United States by opening a second Louis Vuitton facility in Texas to reduce import costs.

Much of the strength of the luxury retail market today is fueled by the shopping habits of Gen Z and Millennials, according to JLL.

JLL reported that Tapestry’s Coach brand notched a 14% increase in sales during the fiscal fourth quarter of 2025 and a jump of 10% for the full year. Gen Z and Millennials make up 60% to 70% of the brand’s new North American customers, JLL says.

Prada Group’s Miu Miu saw its retail sales surge by 49% in the first half of 2025, with a sizable portion of these sales coming from younger consumers.