Hermès has reopened its Oak Street store, indicating that luxury shopping corridors are thriving despite challenges faced by some retail districts and competition from online sellers. The luxury retailer spent over a year renovating and expanding its Oak Street location, which sells handcrafted French leather goods and other luxury items. The surrounding Gold Coast neighbourhood, especially along Oak Street, has seen most of its retail spaces occupied, and the luxury category in retail has experienced a resurgence since the onset of the COVID-19 pandemic.
The pandemic led to a decline in spending on certain luxuries, leaving wealthy individuals with more disposable income, and luxury shops like Hermès, Giorgio Armani, Prada, and Chanel provided outlets for that surplus cash. Even middle-class shoppers have started exploring luxury stores more frequently, purchasing less expensive items but still contributing to store profits.
Hermès, with approximately 300 stores in 45 countries, continued to grow in 2023, reporting more than 10 billion euros in sales by the end of September, a 17% increase compared to the same period in 2022. The company emphasises creating a comfortable and immersive shopping experience for its customers.
The prosperity along Oak Street may provide some relief to the Magnificent Mile, which is grappling with a number of empty storefronts. As retailers compete for the few remaining spots in the Gold Coast, some may start considering North Michigan Avenue, which offers more available space and lower rents.
Retailers are set to fill several vacancies along the Magnificent Mile in the coming year, and new office tenants, cultural institutions, and other developments in the area are contributing to the transformation of Michigan Avenue.
The Magnificent Mile Association, in collaboration with the Chicago Department of Planning and Development and the Urban Land Institute, has outlined plans to enhance the district, including the addition of a pedestrian bridge linking North Michigan Avenue with Oak Street Beach, new pocket plazas and sidewalk cafes, and a public common stretching from Water Tower Place to Lake Shore Drive. These efforts aim to revitalise the district and realise the vision of Michigan Avenue as Chicago’s Champs-Élysées, as envisioned by Daniel Burnham in the 1909 Plan of Chicago.
