American tourists splurge in Paris shops while the euro slides

PARIS, July 15 (Reuters) – US tourist Shawna Wilson says she has splashed out on four dresses at the exclusive LVMH-owned department store La Samaritaine in Paris, tempted by prices when the euro reached parity with the US dollar.

The euro fell below $ 1[ads1] on Wednesday for the first time in two decades due to fears that rising energy prices triggered by the Ukraine conflict could lead the EU into a protracted economic crisis. read more

“It’s like it’s on sale here,” said Wilson, 49, of Colorado, whose purchase included two dresses for her daughter. “Because the euro and the dollar are about the same, it definitely encourages us to use.”

The weak euro is a major attraction for tourists, especially Americans – which is flagged as a major growth driver for the European luxury goods sector in the second quarter, according to analysts from Barclays.

The strong dollar against the euro contributed to a fourfold increase in tourism spending in Europe in June compared to last year, with an acceleration in spending by Americans, said analysts at UBS, which cites data from VAT refund provider Planet.

The luxury sector has recovered quickly from the pandemic when people rushed to spend money saved during closures – and bought treats for themselves as socializing resumed.

But sales in China, the world’s largest luxury goods market, have plummeted this year as a new wave of strict covid-19 barriers closed shops, reduced demand and also meant fewer Chinese tourists with high consumption in Europe. read more

So as Americans replenish transatlantic flights, their eagerness to profit from the weak euro is helping to replace lost losses due to the lack of Chinese visitors, which was the main source of growth in luxury sales in Europe before the pandemic.

Luxury goods companies Richemont (CFR.S) and Burberry reported higher sales in Europe on Friday, which helped offset a fall of more than 30% in China. read more

France has benefited most from the bulk of tourists’ food.

Sales to tourists in France in June rose to just 11.3% below 2019 levels, a positive sign for French luxury brands that have high exposure to the domestic market, said UBS analysts.

American tourists crowded this week on Avenue Montaigne in Paris, surfing the 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 stuffed baby clothes for her granddaughter.

“We’ve just arrived on Avenue, so we’ve just started our shopping trip,” Penn said.

“I like the euro and the dollar being equal, so I know exactly what I’m using,” she 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 it in terms of price savings,” she told Reuters, estimating that she bought a Birkin bag from Hermes in Paris for $ 4,000 less than it would have cost her in the United States, and paid just over $ 9,000. , also thanks to a refund of VAT.

“You can travel to Europe, take in the culture, but at the same time buy a bag,” said Groner, who also bought bags and accessories from Prada, Dior, Louis Vuitton and Chanel, for a total saving of $ 8,000 compared to US prices, based on her calculations.

Monika Arora, founder of pursebop.com, a news and information site for luxury brands, said she believes the brands will eventually “harmonize” prices.

“They’ve done it many times before,” she said.

Chanel told Reuters in May that it could implement further price increases in July to take into account currency fluctuations – especially the weakness of the euro – and inflation. read more

The attraction from Paris is still strong for American shoppers, even though New York’s exclusive shopping streets abound with luxurious European designer brands.

“So many of my friends more than ever take short weekend trips to Paris and elsewhere, and they shop while they’re there – because that’s what you do while in Paris,” said Jennifer Tumpowski, outside Gucci’s flagship store. on New York’s Fifth Avenue.

Reporting by Lea Guedj, Doyinsola Oladipo, Gigi Zamora and Mimosa Spencer. Edited by Jane Merriman

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