What: Steen & Strøm’s tax-free sales surged 27% in 2025, driven by international shoppers choosing Oslo over London due to favorable VAT policies.

Why it is important:  The development underscores Oslo’s emergence as a leading luxury retail destination, benefiting from policy changes that have disadvantaged London.

Steen & Strøm has reported a 27% surge in tax-free sales for the first eight months of 2025, marking its fourth consecutive year of growth. This robust performance is attributed to the increasing appeal of Oslo as a luxury shopping destination, particularly among international shoppers who are now favouring the Norwegian capital over traditional hubs like London. The abolition of tax-free shopping for tourists in the UK has redirected both international and British consumers to cities where VAT-free purchases remain available, with Oslo’s strategic positioning and service innovation proving decisive. Chinese shoppers have emerged as the most significant international segment, followed by visitors from the US, UK, Thailand, and India, highlighting the global nature of this shift. Steen & Strøm’s investment in a new tax-free refund service has further enhanced its attractiveness, quickly establishing the store as a central hub for VAT reclaims in Norway. These developments reflect a broader transformation in European luxury retail, where policy, consumer behaviour, and targeted investment are reshaping competitive dynamics. 

IADS Notes: Steen & Strøm’s exceptional growth in tax-free sales during 2025 mirrors a wider European trend, as highlighted in Forbes (March 2025), with Oslo’s favorable tax policies and retail investments drawing international shoppers away from London, which has faced a £640 million revenue loss due to the end of tax-free shopping, as reported by Retail Week (February and July 2025). Chinese travellers, now a major force in Oslo’s luxury retail scene, exemplify the global shift in consumer flows and preferences. The store’s strategic innovations and Oslo’s competitive positioning have enabled it to capture demand that previously favoured other European capitals, illustrating how policy and investment are redefining the luxury retail landscape (Forbes, March 2025; Retail Week, February and July 2025).

Steen & Strøm’s tax-free sales surge 

What: Nordstrom re-enters San Francisco with a neighbourhood service hub offering online order pickup, returns, alterations, and local partnerships

Why it is important: Nordstrom’s approach demonstrates how retailers are adapting to urban challenges by prioritising service, local relevance, and experiential engagement.

Nordstrom’s launch of its first Nordstrom Local in Northern California signals a strategic shift in how the retailer serves urban customers. The 1,750-square-foot Fillmore Street hub is designed as a service-only location, providing online order pickup, returns, alterations, and personalised styling without traditional in-store merchandise. This model responds directly to consumer demand for convenience and proximity, especially in neighbourhoods where department stores have recently closed. By offering services such as gift wrapping, beauty packaging recycling, and clothing donations for local charities, Nordstrom Local integrates itself into the community while enhancing the customer experience. The opening marks a notable return to San Francisco for Nordstrom, which had previously exited the city’s retail scene, and reflects a broader industry trend of reimagining physical retail through smaller, service-driven formats. The inclusion of local art and validated parking further underscores the brand’s commitment to neighbourhood relevance and experiential retail. 

IADS Notes: Nordstrom’s San Francisco opening builds on its June 2025 Brooklyn service hub launch, which emphasised omnichannel integration and community partnerships. The model mirrors Falabella’s September 2025 digital-personal shopper blend and responds to the urban retail recalibration seen with Bloomingdale’s closure in January 2025 and the broader downtown department store retreat discussed in March 2025. Community engagement, highlighted by Forbes in April 2025, is central to this strategy, positioning Nordstrom Local as a blueprint for future department store relevance.

Nordstrom Local to open in San Francisco 

What: The impact of Trump’s tariffs is driving up US retail prices, forcing retailers to overhaul supply chains and adjust pricing strategies amid eroding consumer trust.

Why it is important: This development illustrates how trade policy is fundamentally reshaping retail pricing, supply chain management, and consumer relationships in the US market.

Trump’s sweeping tariffs are now directly influencing US retail, with persistent trade levies pushing up prices on a wide range of consumer goods. Retailers, facing mounting import costs and projected inflation of up to 1.5%, are increasingly passing these costs onto consumers, particularly in categories such as footwear and apparel. Department stores like Macy’s and Nordstrom have implemented notable price hikes, reflecting the limits of their ability to absorb additional costs. This environment of rising prices and economic uncertainty has led to significant operational changes, including supply chain restructuring, the adoption of AI-powered analytics, and a renewed focus on resilience and agility. Discretionary spending is contracting, job cuts are rising, and consumer trust is eroding, with a majority of Americans believing companies are exploiting economic conditions for profit. These shifts are fundamentally altering the relationship between retailers and consumers, as well as the competitive dynamics of the US retail sector.

IADS Notes: Since April 2025, the introduction of a 10% minimum tariff has driven widespread price increases, with department stores raising prices across key categories (Inside Retail, April 2025; CNBC, July 2025). Retailers have responded by overhauling supply chains and investing in operational resilience, while consumer trust has eroded, with 63% of Americans suspecting companies of profiteering (Forbes, July 2025). The convergence of tariffs, inflation, and weak consumer confidence has accelerated structural change, forcing the industry to adapt rapidly (The Robin Report, September 2025; Forbes, October 2025).

Impact of Trump tariffs is beginning to show in US consumer prices 

What: Selfridges is expanding and upgrading its Birmingham Beauty Hall, making it the largest beauty space outside London and introducing exclusive brands and experiential services.

Why it is important: The move underscores the strategic importance of beauty as a core pillar for department stores, aligning with successful models at John Lewis.

Selfridges is significantly expanding and upgrading its Birmingham Beauty Hall, now the largest beauty space outside London at 30,000 square feet. The renovation increases retail floor space by 20% and introduces 37 new counters, bringing the total to over 160 brands, with 30 exclusive to Birmingham. The project is being rolled out in phases, with the new Beauty Workshop spotlighting experimental, niche, and founder-led brands such as Gisou, Tatcha, K18, and Korean skincare labels. The perimeter wall will feature 55 curated brands and host rotating pop-ups and activations, while a flagship fragrance hall will launch in November with luxury names like Loewe and Le Labo. Selfridges is positioning beauty as a core pillar of its retail strategy, focusing on services and experiences, with 210 beauty services now available, including holistic treatments and a dedicated nail studio opening in 2026. This comprehensive approach not only broadens the store’s appeal but also reinforces its leadership in experiential and service-driven beauty retail.

IADS Notes: Selfridges’ Birmingham Beauty Hall expansion reflects a broader industry movement, as highlighted in Retail Week (October 2025), where Debenhams and John Lewis have also invested in experiential beauty spaces and exclusive brand partnerships (Fashion Network, June 2025; The Retail Bulletin, August 2025). This strategy has led to increased sales and appointments, validating the focus on beauty as a central pillar. La Samaritaine’s Parisian model (Fashion Network, April 2025) and the revamping of beauty counters at major department stores (BoF, November 2024) further confirm that immersive, service-oriented retail is essential for maintaining relevance and driving growth in the sector.

Selfridges expands and upgrades Birmingham beauty hall 

What: Chinese textile and clothing exports to Europe have surged as US tariffs force manufacturers to redirect goods, intensifying price competition and prompting regulatory action in the EU.

Why it is important: The situation demonstrates the interconnectedness of international trade, with policy changes in one region triggering profound effects on retail dynamics elsewhere.

In 2025, Chinese textile and clothing exports to Europe have risen sharply, with a 20% increase in both value and volume, as manufacturers reroute goods away from the US in response to heavy tariffs. This trade diversion has led to a €2 billion surge in low-cost clothing imports, intensifying price competition for European brands and prompting concerns about market disruption. The shift is closely tied to the US elimination of the de minimis exemption, which forced e-commerce giants Shein and Temu to pivot their focus to Europe, highlighting the vulnerability of cross-border retail models to regulatory changes. The EU has responded by introducing a €2 fee on low-value parcels and considering the removal of the €150 duty-free threshold, aiming to manage the influx of Chinese shipments and protect local retailers. These developments underscore how global trade policy shifts can rapidly reshape supply chains, competitive dynamics, and regulatory priorities across the retail sector.

IADS Notes: Chinese exports to Europe surged by 20% in early 2025 as US tariffs redirected trade flows, intensifying price competition and prompting the EU to introduce a €2 parcel fee and consider abolishing the €150 duty-free threshold (Financial Times, October 2025; Inside Retail, May 2025; Journal du Net, April 2025). The shift is linked to the US closing the de minimis exemption, forcing Shein and Temu to focus on Europe (Financial Times, June 2025). This has accelerated innovation and regulatory reform in the European retail sector, as local brands adapt to heightened competition from Chinese e-commerce platforms (GDI, August 2025).

China reroutes clothes exports to Europe after US tariffs upset trade 

What: Harrods’ comprehensive compensation scheme for abuse victims, now exceeding £60 million, has contributed to a significant annual loss and set new standards for corporate accountability in luxury retail.

Why it is important: Harrods’ actions establish a new precedent for legal compliance and crisis management in luxury retail, reflecting broader shifts in industry standards.

Harrods’ decision to allocate over £60 million for abuse victim compensation, resulting in a £36.5 million annual loss, marks a pivotal moment for the luxury retail sector. The retailer’s response to more than 250 claims, triggered by a BBC documentary in September 2024, has evolved into a comprehensive, trauma-informed compensation scheme. Initially capped at £300,000 per victim in March 2025, the maximum payout was raised to £400,000 by April 2025, reflecting ongoing consultations with survivors and legal representatives. By July 2025, over 100 individuals had entered the scheme, which remains open until March 2026 and extends support beyond direct employees. Harrods’ legal move in June 2025 to safeguard Mohamed Al Fayed’s estate for additional payouts further demonstrates a commitment to accountability and governance. These measures, alongside strengthened staff training and workplace protections, set a new industry benchmark for addressing legacy issues, balancing financial risk, brand reputation, and legal compliance in luxury retail.

IADS Notes: Since October 2024, Harrods has faced over 250 claims following a BBC documentary, leading to the creation of a compensation scheme that increased from £300,000 per victim in March 2025 to £400,000 by April 2025 (Drapers, Fashion Network). By July 2025, more than 100 individuals had entered the scheme, which remains open until March 2026 (Retail Week, July 2025). In June 2025, Harrods filed a High Court application to safeguard Mohamed Al Fayed’s estate for further payouts, marking a significant shift in legal and governance standards (Financial Times, June 2025). These actions, combined with enhanced staff training and workplace protections, have set new benchmarks for corporate accountability in the sector (Retail Week, October 2024).

Harrods allocates £60m for abuse victims as store records loss 

What: Harrods maintained stable turnover but posted a significant loss due to compensation payouts and digital transformation expenses, while continuing to invest in store redevelopment.

Why it is important: Harrods’ results reflect the broader luxury market’s struggle with declining tourist spending and the impact of the UK’s tax-free shopping policy, as seen in recent industry reports.

Harrods’ latest financial results reveal a complex picture for the iconic retailer. While turnover edged up by 0.6% to just under £1.082 billion for the year to February 2025, this growth lagged behind UK inflation and marked a sharp slowdown from the previous year’s performance. The company swung to a pre-tax loss of £34.3 million, a stark reversal from the prior year’s £111.5 million profit, primarily due to exceptional costs. These included significant compensation payouts related to historic abuse cases involving former owner Mohamed Fayed and substantial investment in a digital transformation of Harrods’ enterprise systems. Despite these setbacks, Harrods’ management emphasised the resilience of the business, pointing to ongoing redevelopment of its Knightsbridge store and continued renovation of key areas such as womenswear and The Georgian restaurant. The results highlight the retailer’s ability to maintain stable trade and outperform the broader luxury sector, even as the market faces persistent challenges from reduced tourist spending and the absence of VAT-free shopping.

IADS Notes: Harrods’ performance must be viewed against the backdrop of a luxury market grappling with the loss of VAT-free shopping, which led to a £640 million revenue shortfall in London’s West End (Retail Week, February 2025). The sector’s struggles with declining tourist spending and shifting consumer patterns were further documented in August 2025 (Financial Times, August 2025, Vogue Business, August 2025), while Harrods’ resilience and digital transformation efforts were highlighted in July 2025 (Internet Retailing, July 2025). These developments mirror broader industry trends, with leading retailers investing in innovation and customer experience to navigate ongoing market pressures.

Harrods sales flat despite challenging condition 

What: A new wave of middle management layoffs is sweeping through retail and tech, driven by post-pandemic correction, cost-cutting, and the gradual adoption of AI and automation in administrative tasks.

Why it is important:  As AI and automation reshape retail, the evolving role of middle managers becomes critical for technology adoption, operational resilience, and future leadership development.

Middle managers are facing unprecedented pressure as companies across retail and tech aggressively cut management layers to improve efficiency and reduce costs. This trend is partly a correction after pandemic-era overhiring and overpromotion, especially in sectors that rapidly expanded during Covid-19. While AI and automation are often cited as drivers of these cuts, current data shows that most layoffs are not yet directly linked to AI; instead, automation is gradually taking over routine administrative and monitoring tasks. Despite these reductions, effective middle managers remain vital for driving technology adoption, upskilling teams, and maintaining operational resilience. Gen Z’s reluctance to pursue middle management roles, viewing them as high-stress and low-reward, is prompting organizations to rethink talent pipelines and management structures. The industry is now challenged to balance technological innovation with human leadership, ensuring that middle managers are empowered to bridge strategic vision and practical implementation as retail undergoes digital transformation.

IADS Notes: The current wave of middle management layoffs and organizational delayering in retail and tech, as reported by India Economic Times in March 2025 and Forbes in March 2025, reflects a sector-wide push for cost discipline and operational efficiency amid economic uncertainty and post-pandemic correction . Sifted in January 2025 and ERE Media in April and June 2025 highlighted that while AI and automation are gradually taking over administrative and monitoring tasks, there is not yet a direct link between AI adoption and management cuts; instead, the focus is on augmenting human capabilities and freeing up managers for more strategic work . The Financial Times in February 2025 and BCG in September 2025 noted that Gen Z’s reluctance to pursue middle management roles is prompting organizations to rethink talent pipelines and management structures . The IADS White Paper on Middle Management (2025) further underscores that effective middle managers remain crucial for driving technology adoption, corporate training, and operational resilience, especially as organizations navigate digital transformation. The White Paper recommends proactive talent management, leadership development, and a balanced approach to AI integration—ensuring that middle managers are empowered to bridge strategic vision and practical implementation in a rapidly evolving retail landscape.

Bonfire of the middle managers 

What: Sweet Park at Shinsegae Department Store has become a major draw for millennials, Gen Z, and tourists, transforming desserts into a standalone category and driving rapid growth in Korea’s sweet scene.

Why it is important: The concept demonstrates the power of food and dessert innovation to boost footfall, diversify revenue, and position department stores as lifestyle and tourism destinations

Shinsegae’s Sweet Park, a dessert specialty hall at its Gangnam branch, has surpassed 12 million visitors since opening in February 2024, establishing itself as a “dessert mecca” for both domestic and international customers. By elevating desserts from a corner of the food hall to a dedicated, experiential space, Sweet Park has doubled dessert sales and increased their share of food hall revenue from 15% to 30%. The hall’s curated mix of global and local brands, rotating pop-up zones, and focus on narrative-driven, everyday consumption has attracted a particularly high proportion of millennials and Gen Z, as well as a growing number of tourists. Sweet Park’s success has inspired benchmarking visits from overseas retailers and is positioning Korea as a global K-dessert hub, mirroring the international rise of K-food and K-beauty. Shinsegae plans to expand the concept to other branches and continue innovating through brand collaborations and space upgrades, reinforcing the role of experiential retail in driving growth and customer engagement.

IADS Notes: Shinsegae’s Sweet Park exemplifies the transformation of Korean department stores into experiential, category-driving destinations. As reported by Maeil Business Newspaper in February 2025 and Forbes in April 2025, the success of “House of Shinsegae” and The Heritage demonstrates how experiential retail concepts can attract younger customers and tourists, driving significant sales growth and brand differentiation . Maeil Business Newspaper in July 2025 and Korea Herald in August 2025 highlighted how Sweet Park and similar initiatives have doubled dessert sales and increased their share of food hall revenue, showing the potential for new growth drivers in retail . The Chosun Daily in June 2025 and Korea JoongAng Daily in September 2025 described how Korean department stores are leveraging pop-up formats and cultural storytelling to promote K-desserts internationally, with Sweet Park drawing benchmarking interest from overseas retailers . Inside Retail in July 2025 and The Korea Herald in April 2025 discussed the importance of rotating pop-up zones and dynamic brand curation to maintain customer interest and relevance . Finally, Maeil Business Newspaper in January 2025 and Inside Retail in May 2025 provided context on the competitive landscape and the need for Korean department stores to innovate and differentiate through experiential retail and new category development . Collectively, these developments show that Sweet Park is not only a driver of footfall and sales but also a model for global benchmarking and the export of K-dessert culture.

Shinsegae's Sweet Park draws 12 million visitors 

What: Retailers are transforming stores into community-focused third places, using experiential amenities to increase dwell time and foster customer loyalty.

Why it is important: The trend demonstrates how retailers are responding to social isolation and changing consumer expectations by creating spaces that foster genuine connection.

Retailers are increasingly reimagining their stores as vibrant community hubs, moving beyond traditional commerce to create environments that encourage customers to linger, socialise, and build lasting relationships with brands. This evolution is marked by the integration of experiential amenities such as in-store cafés, free beverages, and open seating, all designed to enhance dwell time and emotional engagement. Brands like Tecovas, Coach, and Sephora are at the forefront of this movement, offering radical hospitality and interactive experiences that blur the line between shopping and socialising. Department stores and specialty retailers alike are adopting community-driven programming, from art exhibitions to wellness events, to attract diverse audiences and foster a sense of belonging. This approach not only addresses the growing issue of social isolation but also aligns with shifting consumer values, particularly among younger generations who prioritize meaningful connections over transactional interactions. As a result, success in retail is increasingly measured by the depth of community engagement and the quality of customer experiences rather than immediate sales.

IADS Notes: Throughout 2024 and 2025, the retail industry has seen a marked shift toward third spaces, with brands like Coach, Louis Vuitton, and Ralph Lauren integrating hospitality and community-focused experiences into their stores (Inside Retail, Jan 2025). Department stores such as Le Bon Marché and Printemps have prioritised dwell time and cultural programming (Forbes, Apr 2025), while retailers like Patagonia and Apple have leveraged events to combat social isolation (Inside Retail, Oct 2024). The transformation of malls into experiential venues has been documented in Santa Monica and beyond (Los Angeles Times, Mar 2025). Industry leaders at the World Retail Congress have emphasised the importance of balancing technology with authentic human connection, confirming that community engagement and experiential loyalty are now central to retail strategy (Fashion Network, May 2025).

Can a store ever be a ‘third place?’ 

What: M&S introduces a new performance-led menswear collection under its Autograph sub-brand, targeting younger, style-conscious customers with adaptable and technologically advanced clothing.

Why it is important:  M&S’s strategy highlights the importance of in-house brand development and operational agility in driving sales growth and attracting new customer segments.

M&S has unveiled Autograph Performance, a new menswear collection within its Autograph sub-brand, designed to address the evolving needs of modern men across work, travel, and leisure. The line features advanced fabrics such as Tech Wool and 360 Flex technology, offering four-way stretch tailoring, crease-recovery suiting, and water-resistant materials for maximum adaptability. The Performance Packable Suit, priced competitively, is tailored for the growing number of hybrid and remote workers, reflecting a shift in workplace attire preferences. The collection also includes moisture-wicking chinos, antibacterial shirts, and footwear with Smart Step Technology, all aimed at enhancing comfort and versatility. Autograph Menswear’s value has quadrupled over three years, now representing nearly a quarter of M&S’s total menswear sales, and the brand is successfully attracting a younger demographic, with over half of its customers under 45. This launch supports M&S’s broader strategy to expand its appeal among men aged 35-54 and reinforce its relevance in men’s fashion. 

IADS Notes: M&S’s Autograph Performance launch mirrors industry-wide shifts toward innovation and versatility, as seen at John Lewis with its focus on advanced fabrics and collaborations (Drapers, April 2025; Fashion Network, September 2025). Both retailers are targeting younger, style-driven consumers, adapting to hybrid work trends (Sifted, April 2025), and leveraging in-house brand development to drive growth. M&S’s operational agility and renewed focus on core categories have resulted in robust sales increases, with Autograph now a key contributor to menswear performance (Retail Week, September 2025; WWD, November 2024).

M&S launches 'Autograph Performance' menswear line 

What: Lindex opens its first own store in Denmark at Rødovre Centrum, strengthening its Nordic presence and following a multi-format expansion strategy with Magasin du Nord.

Why it is important:  The move reflects a broader trend of Nordic retailers investing in multi-format strategies and experiential retail to adapt to evolving consumer expectations and drive sustainable growth.

Lindex has inaugurated its first own store in Denmark, located in Rødovre Centrum just outside Copenhagen, marking a significant step in its international expansion and commitment to the Nordic market. The 600-square-meter store offers womenswear, lingerie, and kidswear, and is designed to provide an inspiring, seamless shopping experience that blends physical and digital retail. The launch is accompanied by opening offers and in-store activities, aiming to build strong customer relationships and brand accessibility. This opening complements Lindex’s digital presence on lindex.dk and signals a long-term commitment to growth in Denmark, with plans for further stores and a strategic partnership with Magasin du Nord in 2026. The initiative underscores the importance of location, omnichannel integration, and brand differentiation in today’s competitive retail landscape, as Lindex seeks to inspire more Danish customers and reinforce its position in the region.

IADS Notes: Lindex’s grand opening in Denmark and its partnership with Magasin du Nord mark a significant milestone in the brand’s Nordic expansion and omnichannel strategy. As reported by Press Release in March 2025, Lindex’s shop-in-shop launch in Magasin’s Copenhagen flagship and plans for further category expansion demonstrate a commitment to building strong customer relationships and brand accessibility in Denmark . Via Ritzau in October 2024 and April 2025, along with Fashion Network in July 2025, highlighted Magasin’s “Small Store” concept, digital integration, and investments in Danish brands, reflecting the broader trend toward localized, omnichannel retail and enhanced customer experience . Press Release in February 2025 and Via Ritzau in April 2025 emphasized Lindex’s focus on Swedish design, personalized shopping, and strategic investments in beauty and fashion brands to strengthen its Nordic presence . Financial performance remains robust, with Press Release in February 2025 noting improved profitability and digital growth, while placera.se in December 2024 described the ongoing strategic review of Stockmann department stores, underscoring the importance of digital transformation and market adaptation . Fashion Network in July 2025 and Retail Week in August 2025 discussed the competitive landscape in Danish retail, with Salling’s expansion into Copenhagen and Magasin’s strategic partnerships and investments to maintain market relevance . Collectively, these developments show that Lindex is leveraging partnerships, omnichannel innovation, and brand differentiation to drive growth and strengthen its position in the Nordic region.

Stockmann’s Lindex opens a flagship in Denmark

What: Hong Kong’s retail sales rose 3.8% year-on-year in August, marking the fourth consecutive month of growth driven by inbound tourism and government mega-event initiatives.

Why it is important: This growth reflects a tentative stabilization in Hong Kong’s retail sector, but highlights the ongoing disconnect between rising visitor numbers and actual spending.

Hong Kong’s retail sector experienced a notable acceleration in August, with sales rising 3.8% year-on-year to HK$30.3 billion, marking the fourth consecutive month of growth. This upturn is attributed to a surge in inbound tourism, particularly from mainland China, and the government’s proactive promotion of mega-events, which have buoyed consumer sentiment. Despite these positive signals, the sector continues to grapple with fundamental challenges. The increase in visitor arrivals has not fully translated into proportional retail spending, as many tourists now prioritise experiences over shopping, a trend exemplified by the rise of “special forces” travelers who spend minimally during short trips. Luxury retail remains a draw, especially in tax-free districts, but broader spending patterns remain subdued. Online retail continues to expand, accounting for 8.4% of sales in August and growing 8.9% year-on-year, reflecting the sector’s ongoing digital transformation. While October’s “golden week” is expected to further boost consumption, the underlying disconnect between foot traffic and actual sales underscores the need for continued adaptation and innovation.

IADS Notes: As reported in Inside Retail in September 2025, Hong Kong’s retail sector has seen modest growth for several consecutive months, yet the increase in visitor arrivals—largely due to government mega-event initiatives and multiple-entry visas—has not translated into proportional retail spending. Retail Asia in March 2025 highlighted that Shenzhen’s multiple-entry visa policy brought more tourists but failed to boost sales, as many mainland Chinese visitors now prioritise experiences over shopping. The Financial Times in May 2025 documented the rise of “special forces” tourists, whose minimal spending has challenged luxury retail despite high footfall. Fashion Network in September 2025 noted that, although luxury gifting categories showed some resilience, overall spending remains subdued and the gap between traffic and sales persists. Inside Retail in March 2025 further emphasised the ongoing structural changes in the sector, with digital transformation and online sales growth emerging as key adaptive strategies.

Hong Kong’s retail recovery accelerates as August sales rise by 3.8%

What: Retailers face significant barriers in scaling agentic, physical, and sovereign AI, with operational, regulatory, and workforce challenges slowing industry transformation.

Why it is important: The ongoing struggle to scale AI in retail demonstrates the need for continuous investment in upskilling, infrastructure, and governance, reflecting the latest market insights.

The retail industry is accelerating its adoption of advanced AI technologies, including agentic, physical, and sovereign AI, to enhance operations, customer engagement, and supply chain efficiency. However, despite widespread enthusiasm, only 10% of retailers have succeeded in scaling these solutions, revealing a persistent gap between potential and realised value. Key obstacles include the integration of AI with legacy systems, high costs associated with physical AI deployment, and the complexity of evolving regulatory and data sovereignty requirements. Workforce readiness remains a critical concern, as only 36% of retail employees feel adequately prepared for AI-driven change, highlighting the urgent need for systematic upskilling and talent development. While 71% of employees now use AI tools weekly and 87% of retailers report revenue growth from AI initiatives, the sector’s progress is hindered by fragmented compliance landscapes and mounting cybersecurity risks. Sustainable transformation will depend on retailers’ ability to invest in workforce capabilities, modernise infrastructure, and implement robust governance frameworks that can adapt to regulatory shifts and technological advances.

IADS Notes: As observed in July 2025, the retail sector’s AI adoption is marked by high usage rates and measurable efficiency gains, but only a small fraction of companies have scaled these solutions successfully. March 2025 data confirms the shift toward value creation, while September 2025 research highlights the urgent need for workforce transformation. The regulatory and geopolitical complexity described in December 2024 is now a defining factor, and the September 2025 Bain report underscores the critical importance of cybersecurity and compliance in sustaining AI-driven growth.

AI trends 2025: Adoption barriers and updated predictions

What: Private member clubs are emerging as the next-generation department store, driving traffic and engagement in luxury retail through exclusivity, hospitality, and experiential programming.

Why it is important: The rise of member clubs reflects the growing demand for personalized, status-driven experiences, making them a key lever for customer retention and competitive advantage in luxury retail.

Luxury retailers and shopping districts are increasingly launching private membership clubs to attract and retain high-net-worth shoppers, offering exclusive access to curated experiences, hospitality, and community. These clubs—such as The Moore Club in Miami, Kith Ivy in New York, and Selfridges’ upcoming 40 Duke in London—are being positioned as the next-generation department store, with landlords and brands designing tenant mixes and retail ecosystems around members-only spaces. Research shows that 86% of affluent consumers participate in at least one membership program, with higher engagement and redemption rates than other income brackets. For luxury consumers, exclusivity and community have become new forms of currency, with clubs providing both status and a private escape from the public sphere. Successful programs balance public-facing elements like restaurants and galleries with private, members-only areas, creating aspirational yet functional spaces that drive reliable engagement and repeat visits. This trend is reshaping the luxury retail landscape, as brands and landlords seek to create differentiated, high-value experiences that foster loyalty and competitive advantage.

IADS Notes: The rise of private membership clubs in luxury retail, as highlighted by Inside Retail in September 2025, reflects a broader industry shift toward experiential, community-driven engagement and exclusive loyalty strategies . Selfridges’ launch of its 40 Duke members club, covered by Retail Gazette and BoF in June 2025, exemplifies how department stores are converting prime real estate into hospitality-driven venues to attract high-net-worth individuals and create new revenue streams . Fashion Network in October 2024 and Inside Retail in May 2025 discussed how luxury brands and retailers are investing in exclusivity, tailored loyalty programs, and community-building to deepen relationships with affluent consumers . Fashion Network and Vogue Business in May 2025 noted the competitive advantage of blending retail, wellness, and social status through “third spaces” and exclusive experiences . Finally, Inside Retail in September 2025 and Forbes in April 2025 highlighted research showing that affluent consumers highly value membership programs, with exclusivity and community engagement driving loyalty and spend . Collectively, these developments show that private clubs are becoming a key strategy for luxury retailers and landlords to drive traffic, foster loyalty, and create differentiated, high-value experiences in a competitive market.

Why high-end retail players are embracing private member clubs 

What: Vestiaire Collective has launched a carbon credit initiative that quantifies and sells the emissions avoided through secondhand fashion.

Why it is important: This initiative demonstrates how circular business models can create new revenue streams while meeting rising regulatory and consumer demands for sustainability.

Vestiaire Collective has introduced a pioneering carbon credit initiative, positioning itself as the first pre-owned fashion business to monetise avoided emissions by quantifying and selling carbon credits based on the environmental benefits of secondhand purchases. This approach relies on a rigorous, third-party-certified methodology, ensuring transparency and credibility in measuring the emissions prevented when consumers choose pre-loved items over new ones. The initiative responds to the ongoing challenge in the fashion industry, where fewer than half of the top 250 brands have verified emissions reduction targets, and Scope 3 emissions remain a significant concern. By issuing credits on the voluntary carbon market, Vestiaire Collective not only opens a new revenue stream but also reinvests proceeds into strengthening authentication, curation, and consumer education, further supporting the circular economy. The project also delivers local economic benefits in Tourcoing, France, reinforcing the link between sustainability and regional revitalisation. This development exemplifies how circular business models can address both environmental and commercial imperatives in retail.

IADS Notes: Vestiaire Collective’s carbon credit initiative reflects the retail industry’s broader shift toward circularity and measurable sustainability, as seen in March 2025 with the mainstreaming of circular strategies (“The benefits of a circular economy strategy in retail,” The Retail Bulletin), and in July 2025 with the call for scalable, systematic transformation (“The Kearney CFX 2025 report: circular fashion growing but still not at scale,” Kearney/Fashion Network). The emphasis on transparency and third-party verification aligns with the complexity of sustainability reporting highlighted in February 2025 (“Confused by supply chain reporting rules? You’re not the only one,” Vogue Business), while the focus on Scope 3 emissions and science-based targets echoes the industry’s ongoing challenges (“Fashion is neglecting nature. Now what?” Vogue Business, February 2025). The surge in secondhand shopping and repairs reported in December 2024 (“Rising cost of living pushes secondhand shopping, repairs,” Retail Asia) further underscores the relevance of Vestiaire’s approach.

Vestiaire Collective launches carbon credits initiative

What: Prada Group receives EU approval to acquire Versace’s parent company for €1.25 billion, with the deal set to close in 2025.

Why it is important: The deal’s financial and strategic dimensions reflect broader trends in luxury retail, where portfolio diversification and operational synergies are key to navigating market volatility.

Prada Group has secured European Commission approval for its €1.25 billion acquisition of Versace’s parent company, Givi Holding, with the transaction expected to close in 2025. The Commission’s decision, citing no competition concerns, underscores the deal’s alignment with current regulatory expectations for luxury sector consolidation. This acquisition follows a period of heightened scrutiny on large-scale mergers, as seen in the failed Tapestry-Capri deal, and signals a strategic pivot toward focused, brand-compatible expansion. Prada’s integration of Versace, a house with a distinct creative legacy, is designed to diversify its portfolio without internal overlap, aiming to reach new audiences and strengthen operational synergies. Financially, Prada’s recent revenue growth and Versace’s global store network position the group for enhanced market resilience, especially as other luxury conglomerates face profit declines and restructuring pressures. The move not only reinforces Prada’s commitment to creative differentiation but also exemplifies a new era in luxury retail, where strategic acquisitions are essential for long-term stability and growth.

IADS Notes: Prada’s acquisition of Versace (WWD), reflects a broader industry trend toward targeted consolidation, as highlighted by the failed Tapestry-Capri merger in November 2024 (CNBC) and the successful Mytheresa-YNAP deal in October 2024 (BoF, Retail Insight Network). The European Commission’s clearance echoes the regulatory scrutiny shaping luxury M&A, while Prada’s focus on portfolio diversification and operational synergy stands in contrast to the mixed financial results and restructuring efforts seen at Kering throughout early and mid-2025 (WWD, BoF).

Prada Group secures EU approval for €1.25bn Versace acquisition

What: Harvey Nichols launches “125,” a new ground floor retail space at its Knightsbridge flagship, featuring curated design, art installations, and exclusive brand collaborations.

Why it is important : This launch exemplifies how luxury retailers are using strategic refurbishments and immersive experiences to modernise their flagship stores and strengthen market position.

Harvey Nichols has introduced “125,” a newly designed retail space on the ground floor of its Knightsbridge flagship, marking a significant phase in the store’s ongoing refurbishment. This destination brings together a carefully curated selection of established and emerging designers across home, lifestyle, and jewellery, with brands such as George Jensen, Alighieri Casa, and Gohar World featured prominently. The space is distinguished by bold artistic elements, including a striking totem pole installation by Gary Card, which sets a dynamic tone for visitors and signals a new era for the brand. Enhanced by increased natural light and a vibrant use of primary colours, “125” also incorporates a platform for innovative design collaborations, such as the “Take A Seat” project in partnership with Pad London. The redesign is part of a broader strategic overhaul, with phased redevelopment planned for the entire store, and includes a prominent pop-up window for exclusive brand activations. This initiative reflects Harvey Nichols’ philosophy of extending fashion sensibility into all aspects of lifestyle and customer experience.

IADS Notes: The launch of “125” at Harvey Nichols’ Knightsbridge flagship is a direct outcome of the retailer’s £25.5 million investment in phased refurbishment, as detailed in WWD (July 2025) and Fashion Network (September 2025). This transformation, led by CEO Julia Goddard, emphasises adaptable design, curated luxury, and emerging brands, while integrating dynamic pop-up spaces for exclusive activations, as outlined in the Financial Times (February 2025). The approach aligns with recent industry trends, including experiential, artist-led environments at Bloomingdale’s (WWD, September 2025), and the growing adoption of pop-up shop strategies highlighted in WWD (October 2024).

Harvey Nichols launches new lifestyle space ‘125’

What: Lotte Department Store is advancing its ESG agenda by running a nationwide cold-storage bag collection event and paying 350 billion won early to its partners.

Why it is important: This approach demonstrates how retailers can balance sustainability, customer loyalty, and supplier relations to strengthen their market position.

Lotte Department Store is reinforcing its leadership in ESG by launching a nationwide cold-storage bag collection event during Chuseok and advancing 350 billion won in payments to its partners. The collection programme, which began in 2022, incentivises customers with L.POINT rewards for returning reusable cold-storage bags, fostering a culture of resource circulation and sustainability. The initiative has seen significant growth, with the number of bags collected rising by 60% over three years and a cumulative total of 80,000 bags. These bags are either upcycled into practical products or donated to support vulnerable communities, demonstrating a commitment to both environmental and social responsibility. In parallel, Lotte’s early payment to partners, completed eight days ahead of schedule, highlights its dedication to win-win management and supplier well-being, especially during the holiday season. These efforts underscore Lotte’s strategy of integrating sustainability, customer engagement, and robust partner relations, setting a benchmark for responsible retail practices.

IADS Notes: Lotte’s ESG-driven actions, including its human rights management certification in August 2025 (The Chosun Daily), reflect a broader transformation in Asian retail, with peers like Hyundai also prioritising sustainability and governance in July 2025 (Maeil Business Newspaper). Lotte’s customer engagement through recycling incentives aligns with global trends in loyalty innovation, as seen in May 2025 (Fashion Network). Its early partner payments contrast with the supplier challenges faced by Debenhams and Saks in 2025 (Retail Week, BoF), while its upcycling initiatives mirror circular economy strategies adopted by Falabella and Fortnum & Mason in February and September 2025 (America Retail, Retail Week).

Lotte Department Store is reinforcing its leadership in ESG

What: Shein is entering the French physical retail market through a partnership with SGM (Société des Grands Magasins), opening permanent stores at BHV Marais and several franchised Galeries Lafayette locations.

Why it is important: Shein’s entry into physical retail comes amid heightened regulatory scrutiny and reputational risks, underscoring the challenges and opportunities facing fast-fashion in Europe. 

Shein’s launch of its first permanent physical retail spaces in France, beginning with BHV Marais in Paris and expanding to regional Galeries Lafayette stores, marks a significant evolution in the brand’s strategy. This move is positioned as a commitment to revitalising city centres and attracting a younger clientele, leveraging Shein’s deep understanding of online sales data to tailor local assortments. The partnership with Société des Grands Magasins (SGM) not only supports the ongoing reinvention of department stores but also reflects broader trends in the retail sector, where collaborations between digital disruptors and traditional retailers are becoming increasingly common. However, Shein’s expansion is accompanied by considerable controversy, including accusations of unfair competition, environmental harm, and labor violations, as well as a record €40 million fine in France for deceptive pricing. These challenges highlight the complex regulatory environment and reputational risks that fast-fashion brands must navigate as they seek to blend digital and physical retail.

IADS Notes: Shein’s physical retail debut at BHV Marais aligns with SGM’s broader transformation strategy for department stores, as outlined in June 2025 (Fashion Network: “Société des Grands Magasins (SGM) has a new plan to acquire BHV Marais’ property”). The brand’s rapid growth in France, with 23 million customers and strong rural penetration reported in March 2025 (Journal du Net: “Who are Shein’s customers in France?”), has disrupted traditional retail models. Yet, this expansion is set against a backdrop of mounting regulatory scrutiny, including the €40 million fine in July 2025 (Fashion Network: “Shein fined €40m for deceptive pricing in France”), and reputational risks highlighted by the Pimkie-Shein partnership in September 2025 (Fashion Network: “French brand Pimkie partners with Shein to accelerate its digital transformation”). Globally, Shein’s disruptive digital-first model, as seen in South Africa in August 2025 (Inside Retail: “Shein and Temu outpace global retail giants in South Africa’s fashion market”), is now facing increased regulatory intervention.

Shein to launch first permanent physical stores in French department stores

What: Selfridges achieved operating profit growth and reduced pre-tax losses by prioritising profitable sales, digital innovation, and immersive customer engagement amid persistent external pressures.

Why it is important: The results highlight the necessity for luxury retailers to balance profitability with customer engagement and resilience in the face of declining tourism and economic uncertainty.

Selfridges’ latest financial results reveal a company in transition, navigating a turbulent luxury retail landscape with a focus on profitability and innovation. Despite a technical drop in revenue to £774.6 million due to a shorter financial year and a strategic emphasis on higher-margin sales, the retailer improved its operating profit to £42.2 million and significantly reduced its pre-tax loss to £15.9 million. This turnaround was achieved through effective cost controls and a deliberate pivot toward digital retail, even as the business continued to feel the effects of reduced international tourism, supply chain disruptions, and inflation. The partial exit of Austria’s Signa Retail and the entry of Saudi Arabia’s Public Investment Fund as minority owner, alongside Central Group’s majority stake, provided ownership stability and strategic direction. Selfridges’ experiential retail strategy, including the expansion of its Unlocked membership scheme and immersive in-store activations, has driven customer engagement, though questions remain about the direct commercial impact. Notably, beauty and circularity initiatives delivered robust growth, reinforcing Selfridges’ position as both a cultural and retail destination.

IADS Notes: Selfridges’ financial and strategic evolution mirrors recent industry developments, with significant property evaluation and ownership changes in late 2024 (“Selfridges faces significant property devaluation amid financial restructuring,” Retail Gazette, October 2024; “Selfridges sinks further into the red as sales at luxury department store falter,” City AM, November 2024) setting the stage for a renewed focus on exclusive partnerships and immersive experiences by January 2025 (“Selfridges reveals its retail strategy for 2025,” WWD, January 2025). The retailer’s AI-powered loyalty programme and experiential engagement have set new benchmarks for customer relationships, as seen in August 2025 (“What Selfridges Unlocked reveals about the future of retail loyalty,” Inside Retail, August 2025), while persistent challenges from reduced tourism and the loss of tax-free shopping, highlighted in February 2025 (“West End lost GBP 640m last year due to no tax-free shopping with muted growth in festive trading,” Retail Week, February 2025), continue to shape the luxury retail environment.

Selfridges results improve

What: Selfridges has reopened its Birmingham store with the UK’s largest beauty hall outside London, featuring expanded brands and immersive experiences.

Why it is important: Selfridges’ strategy demonstrates how regional expansion and innovation in beauty can support financial resilience and brand leadership in a challenging retail environment.
Selfridges’ reopening of its Birmingham store with the UK’s largest beauty hall outside London marks a significant milestone in the evolution of regional retail. The expanded beauty space brings together an extensive range of brands and immersive experiences, positioning Birmingham as a key destination for beauty enthusiasts beyond the capital. This strategic move reflects Selfridges’ broader commitment to innovation and experiential retail, as the company continues to invest in categories that drive customer engagement and footfall. By focusing on beauty—a sector experiencing robust growth—Selfridges not only enhances its competitive edge but also reinforces its reputation as a leader in retail transformation. The initiative is part of a wider trend among department stores, where investment in experiential spaces and regional expansion is proving essential for maintaining relevance and financial resilience. As consumer expectations evolve, Selfridges’ approach demonstrates the importance of adapting store formats and offerings to meet local demand while delivering standout experiences that differentiate the brand in a crowded marketplace.

IADS Notes: Selfridges’ Birmingham beauty hall launch is emblematic of the sector’s shift toward immersive, experiential retail and regional expansion, echoing its 2025 strategy of exclusive partnerships and innovation in beauty, which saw a 10% sales increase and a 22% rise in appointments (WWD, January 2025). This mirrors moves by Debenhams and John Lewis, who have also invested in experiential beauty spaces in major UK cities (Fashion Network, June 2025; The Retail Bulletin, August 2025). Industry analysis confirms that department stores investing in in-store experiences and category leadership in beauty are thriving (The Retail Bulletin, April 2025), while Selfridges’ improved financial results further validate this approach (Fashion Network, October 2025).

Selfridges unveils ‘UK’s biggest beauty hall outside London’

What: Franco Savastano is appointed president and CEO of Holt Renfrew, signaling a new strategic direction for Canada’s leading luxury retailer.

Why it is important: This leadership change positions Holt Renfrew to leverage Savastano’s expertise in luxury partnerships and transformation, aligning with recent market opportunities in Canada.

Holt Renfrew, Canada’s premier luxury retailer, has appointed Franco Savastano as its new president and CEO, marking a significant leadership transition. Savastano brings extensive experience from his previous roles at Globus and Jelmoli, where he was recognised for forging luxury brand partnerships and driving store renovations. His arrival follows the departure of Sebastian Picardo, who led Holt Renfrew through a period of strategic transformation, expanding the product range and digital capabilities while maintaining the brand’s luxury status. The company now operates six stores and generates approximately 700 million Canadian dollars annually, having consolidated its presence after the closures of Nordstrom and Saks Fifth Avenue in Canada. Holt Renfrew is well-positioned to capitalise on these market shifts, with Savastano expected to further integrate brick-and-mortar and online operations and deepen relationships with luxury brands. This transition comes amid broader changes in Canadian retail, including the bankruptcy of Hudson’s Bay, creating new opportunities for agile competitors.

IADS Notes: Franco Savastano’s appointment follows Sebastian Picardo’s transformative tenure, during which Holt Renfrew broadened its product range and digital capabilities (WWD, July 2025; WWD, January 2025). Savastano’s leadership at Globus, focused on luxury partnerships and a brand-driven strategy, is expected to shape Holt Renfrew’s next phase as it seizes opportunities created by the exits of Nordstrom and Saks Fifth Avenue (Blue Win, October 2024; WWD, February 2025). The ongoing restructuring of Canadian retail, highlighted by Hudson’s Bay’s bankruptcy, further positions Holt Renfrew to reinforce its leadership in the evolving market (WWD, March 2025).

Holt Renfrew names Franco Savastano President and CEO

What: Facing a dip in earnings, LVMH is ramping up digital, experiential, and partnership-driven initiatives in Asia, with Moët & Chandon leading growth in the fine wines and spirits segment.

Why it is important:  LVMH’s pivot reflects a broader industry trend, where success in Asia depends on balancing global prestige with local relevance, digital engagement, and agile market adaptation.
LVMH is recalibrating its Asia strategy in response to shifting consumer behavior and a recent earnings dip, focusing on digital engagement, immersive pop-up events, and collaborations with local designers and influencers. The group’s fine wines and spirits division, led by Moët & Chandon, is experiencing robust growth, fueled by rising demand for premium beverages in urban centers like Shanghai and Tokyo. Across its portfolio, LVMH is targeting younger, experience-driven consumers by launching innovative pop-ups and leveraging social commerce, lo-fi content, and AI-powered personalization. Strategic partnerships and regional customization are central to the group’s efforts to blend global prestige with local cultural resonance. As competition intensifies, LVMH’s approach underscores the need for luxury brands to adapt quickly, diversify offerings, and create seamless digital experiences to capture the attention of Asia’s millennial and Gen Z shoppers. 

IADS Notes: LVMH’s recent pivot in Asia, focusing on digital engagement, experiential retail, and local partnerships, reflects broader trends in luxury’s adaptation to shifting consumer behavior. As reported by Inside Retail in February 2025, luxury brands across Asia are leveraging immersive pop-up activations and digital integration to engage younger consumers and test new markets . LUXUS PLUS in January 2025 described the rise of “slow pop-ups” in China, emphasizing longer-term, community-focused experiences that resonate with Gen Z . WWD in April 2025 and The Wall Street Journal in June 2025 highlighted LVMH’s robust performance in wines and spirits, with Moët & Chandon leading growth and the group’s AI strategy supporting operational efficiency and customer engagement . Inside Retail in March 2025 and Vogue Business in October 2024 detailed LVMH’s collaborations with local designers, influencers, and digital platforms to adapt offerings and marketing to regional tastes, especially in China and Japan . The Wall Street Journal in June 2025 and Vogue Business in October 2024 reported on LVMH’s comprehensive AI strategy, digital engagement, and the use of social commerce and lo-fi content to maintain relevance and drive growth in a competitive Asian luxury market . Finally, WWD in April 2025 and Inside Retail in January 2025 noted the challenges of a 2% revenue decline in Q1 2025, the importance of strategic adaptation, and the need for luxury brands to balance global prestige with local relevance and innovation .

LVMH pivots to engage younger demographics in Asia