Is Montenapoleone so expensive that brands are fleeing?

Milan and luxury seem to be in growing symbiosis. After the recent news confirming the Lombard city's status as a Mecca of luxury tourism, this week the annual report by Cushman & Wakefield, "Main Streets Across the World 2024", confirmed that Via Montenapoleone has finally surpassed New York’s Fifth Avenue, becoming the most expensive commercial street in the world. The news comes as little surprise, given that in recent years "Montenapo" has climbed the rankings with remarkable agility, gaining positions year after year. Last year, the Milanese fashion street earned the silver medal, but with an 11% increase in rental rates over the past year, the €20,000 annual per sqm has overtaken the iconic New York avenue. In third place is London’s New Bond Street, which managed to surpass Hong Kong's shopping hub, Tsim Sha Tsui. Increasing data seems to confirm Milan’s status as one of the global luxury hubs, but are its citizens ready to face the consequences?

According to Thomas Casolo, head of Retail Italy and co-head of luxury at Cushman & Wakefield, Milan has become a global brand synonymous with luxury. Via Montenapoleone is a unique case, with a variety of rental values depending on the commercial characteristics of the shops. The current positioning of the street has been influenced by the opening of new stores in the most sought-after area of the Quadrilatero, between Via Verri and Via Sant’Andrea. This success has been further strengthened by the strong demand from retailers, clashing with limited supply of spaces, a dynamic that has contributed to rising rental rates. Additionally, the Cushman & Wakefield report highlights how Via Montenapoleone has benefited from the appreciation of the euro against the US dollar, a factor that has improved the destination’s competitiveness compared to non-European markets. Italy reaffirms its centrality in the European luxury retail scene, with Via Condotti and Piazza di Spagna in Rome ranking third and tenth respectively in the continental ranking, which includes multiple streets per country. Overall, Italy boasts three streets in the European top 10, solidifying its role as a key player in the sector.

However, in the past year, there has been a migration of major brands from Via Montenapoleone to nearby areas. Recently, Dior vacated its historic location on the main vein of the Quadrilatero to move to Corso Venezia, in the former Zara Home premises. As early as 2011, Ferragamo decided to transfer its historic headquarters from Via Borgospesso to Corso Matteotti, while maintaining its boutique in the same building. Among the most sentimental departures was the relocation of the historic Larusmiani boutique, which in 2023 gave up its premises for the opening of Chanel’s new flagship store after nearly 100 years. If even the biggest luxury brands are leaving the street, perhaps the situation is getting out of hand. Unlike other cities of fashion and luxury, Milan has always had the Quadrilatero as a cohesive entity, not just Via Montenapoleone. However, per-square-meter prices continue to rise alongside the housing cost crisis and the real estate bubble. We might soon see Via Sant’Andrea and Via della Spiga also climbing to the podium of the world’s most expensive streets.