Chanel Buys 42 Avenue Montaigne Amid Actual Property Arms Race

Chanel purchased a constructing on Avenue Montaigne, a high-profile buying vacation spot in Paris, as European luxurious gamers swoop in to safe prime actual property for his or her boutiques.

The style label recognized for its tweed jackets and skirts bought the property at 42 Avenue Montaigne, a couple of block away from the Champs-Élysées, in line with a press release, which didn’t disclose the transaction phrases.

Chanel is already current within the constructing with a boutique, and there’s one other of the model’s shops on 51 Avenue Montaigne. Italian insurer Generali was the vendor, in line with individuals conversant in the matter, who requested to not be recognized discussing personal data.

The acquisition of 42 Avenue Montaigne follows different actual property purchases final yr in Paris and in cities together with London and Biarritz, Chanel mentioned within the assertion.

Proudly owning a retailer can shield a retailer from ever-increasing rents and make it simpler to justify the numerous expense required to suit out boutiques and switch them into locations that big-spending prospects need to spend hours buying in. Luxurious gamers, notably LVMH Moet Hennessy Louis Vuitton SE, have invested closely to rework boutiques into artwork and meals locations.

LVMH opened its Christian Dior flagship retailer at no. 30 Avenue Montaigne over two years in the past, and it homes a museum, restaurant, visitor suite and gardens. It labored with famend architect Peter Marino, who’s additionally dealt with retail tasks for Chanel.

The corporate “would by no means have carried out a boutique like 30 Montaigne for Dior in Paris had it been renting the placement,” LVMH Chief Monetary Officer Jean-Jacques Guiony advised Bloomberg earlier this yr. “If we’re a landlord, it permits us to have a distinct imaginative and prescient.”

The Avenue Montaigne is a high vacation spot for luxurious customers, with some staying on the high-end Plaza Athénée lodge, the place nightly charges run as a lot as €2,500 ($2,780) and better.

Chanel’s present property portfolio’s worth is greater than $7 billion, with a good portion having been purchased during the last 10 years, an organization consultant mentioned. The agency plans a serious renovation for the 42 Avenue Montaigne boutique starting in 2029, an individual conversant in the matter mentioned.

Teams from Gucci proprietor Kering SA to Prada SpA have additionally made splashy property acquisitions over the previous yr.

Luxurious’s Newest Battleground: Actual Property

Prime luxurious teams are shopping for actual property to safe landmark retailer areas with critical implications for second-tier gamers who’re already struggling to remain on key luxurious streets, writes Luca Solca.