American tourist Shawna Wilson says she bought four dresses at the LVMH-owned department store La Samaritaine in Paris, lured by prices after the euro reached parity with the US dollar.
The euro fell below $1 on Wednesday for the first time in two decades, on fears that rising energy prices triggered by the Ukraine conflict could plunge the European Union into a protracted economic crisis.
“It’s like they’re on sale here,” said Wilson, 49, of Colorado, whose purchases included two dresses for her daughter. “Since the euro and the dollar are more or less equal, it definitely encourages us to spend.”
The weak euro is a big draw for tourists, especially Americans, who are being singled out as a key driver of growth in Europe’s luxury sector in the second quarter, according to analysts at Barclays.
The dollar’s strength against the euro helped Europe’s tourist spending quadruple in June compared with a year ago, with spending by Americans accelerating, analysts at UBS said, citing data from the data provider. Planet VAT refunds.
The luxury sector has quickly rebounded from the pandemic, as people rushed to spend money saved during lockdowns, shopping for treats as social life resumed.
However, sales in China, the world’s largest luxury goods market, have slumped this year as a new wave of strict COVID-19 lockdowns reduced demand and also led to fewer Chinese tourists. in Europe.
Thus, Americans who fill transatlantic flights, in their eagerness to take advantage of the weak euro, are helping to replace the business lost by the lack of Chinese visitors, who were the main source of luxury sales growth in Europe before the pandemic.
Luxury goods companies Richemont CFR.S and Burberry reported rising sales in Europe on Friday, which helped offset a more than 30% drop in China.
France is the country that has benefited most from the splurge 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 heavy exposure to their home market, UBS analysts said.
American tourists thronged Paris’s Avenue Montaigne this week, browsing luxury boutiques, which include designer names such as Louis Vuitton, Chanel and Gucci.
Cheryl Penn, 70, a real estate agent from 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 spree,” 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 picked up a Hermes Birkin bag in Paris for $4,000 less than it would have cost him in the United States, paying just over $9,000. , thanks also to the VAT refund.
“You can travel to Europe, get to know the culture and at the same time buy a bag,” said Groner, who also bought bags and accessories from Prada, Dior, Louis Vuitton and Chanel, saving a total of $8,000 compared to the prices of United States, according to their calculations.
Monika Arora, founder of pursebop.com, a news and information website about luxury brands, said she thinks brands will eventually “harmonize” prices. “They’ve already done it many times,” she said.
Chanel told Reuters in May that it could apply further price hikes in July to take into account currency fluctuations – particularly a weak euro – and inflation.
Paris’s pull remains strong for American shoppers, even though New York’s high-end shopping streets are packed with luxury European designer labels.
“A lot of my friends, more than ever, take little weekend trips to Paris and other places, and shop while they’re there, because that’s what you do when you’re in Paris,” said Jennifer Tumpowski, on the way out. of the Gucci flagship store on Fifth Avenue in New York.
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