A Chanel store in Baltimore? Why the luxury brand came to Harbor East

The global luxury fashion brand Chanel opened a beauty and fragrance boutique Friday in Harbor East, its only Baltimore-area location.The arrival of the century-old French fashion house is a good sign for the city, said JP Krahel, the chair of accounting at Loyola’s Sellinger School of Business. “They’re not doing this for charity. They’re not doing it based on hope,” Krahel said. “They’re doing it based on solid evidence and market research.”

That means customers who can afford $45 lipstick and $165 perfume. Chanel did not respond to a request for comment on the opening of its new store at 801 Aliceanna St. Perfume fragrance wafted onto the sidewalk Monday morning when a security guard held the door open for a trio of women.

Coming out of the pandemic, the luxury retail industry has been booming and expanding its physical footprint across the country. These brands — think Gucci, Louis Vuitton and Dior — have not only recovered from a pandemic slump, they’ve surpassed previous highs, hitting about $70 billion in total U.S. retail sales, according to a report by the commercial real estate firm JLL. Even after a spike in ecommerce during the pandemic, online sales for luxury retail represent just 15% of total sales, the report said. As revenues rise, many of these brands are doubling down on brick-and-mortar locations.

Chanel recently opened a 30,000-square-foot flagship store on Rodeo Drive in Beverly Hills, the report said. Brands are also opening smaller, strategically curated stores, like the Chanel in Baltimore. The store is a single room with display cases and mirrors and lots of products to try.

Even though Chanel won’t be selling its $10,000 handbags at the store in Baltimore, having a Chanel store is significant, Krahel said.