Rio rebooted: why luxury brands are buying in to the city

Rio rebooted: why luxury brands are buying in to the city

Chamber Articles Category: Procurement Opportunities Post Date: 10/14/16 Source: Financial Times By: Lucinda Elliott
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The spotlight may be dimming on Rio. But while the summer of sport is over, the city is still the focus of continued foreign interest: the big luxury brands are moving in.

Last year five new designer brands moved in to Brazil, including Polo Ralph Lauren and Versace. The French luxury house Hermès unveiled its first Rio outpost this August and will open a third store in the original destination shopping mall of Iguatemi in São Paulo next year. Cartier has recently secured a huge two-story space on Faria Lima, São Paulo’s main shopping street. The house now operates three stores in Brazil.

The arrival and expansion of brands in the country may seem counterintuitive — Brazil is suffering from one of its worst recessions since 1901. But with 200m inhabitants, it’s still one of the largest luxury shopping destinations in South America, with a wealthy local clientele and a sizeable tourist trade.

“There’s been a gear-change among brands with a presence in Brazil,” says Carlos Ferreirinha, founder of the luxury market consultancy MCF Consultoría, and previously regional director for Latin America at the LVMH group. While the summer tournament presented few benefits for high-end retailers — “The weeks of the Olympics are not a good business trade for us anywhere in the world,” says Florian Craen, executive vice-president in charge of sales and distribution at Hermès — the Games played a vital role in changing consumer mindsets. “Everyone expected a low-quality event but it was quite the contrary,” says Maxime Tarneaud, country manager for Cartier in Brazil. “This is good for Brazilian confidence.” Read Full Article