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American tourists splurge in Parisian boutiques amid falling euro

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PARIS, July 15 (Reuters) – American tourist Shauna Wilson says she forked out four dresses at LVMH’s upscale department store La Samaritaine in Paris, tempted by prices as the euro hit parity with the US dollar.

On Wednesday, the euro fell below $1 for the first time in two decades on fears that rising energy prices fueled by the conflict in Ukraine could lead the European Union into a protracted economic crisis. read more

“It feels like it’s on sale here,” said Wilson, 49, from Colorado, who bought two dresses for her daughter. “Because the euro and the dollar are about the same, it definitely encourages us to spend money.”

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A weaker euro is attracting tourists, especially Americans, who Barclays analysts say are seen as a key driver of Europe’s luxury sector growth in the second quarter.

A strong dollar against the euro contributed to a fourfold rise in European tourism spending in June compared to a year ago, with spending by Americans accelerating, UBS analysts said, citing data from VAT refund provider Planet.

The luxury sector recovered quickly from the pandemic as people rushed to spend the money saved during the lockdown by buying themselves treats as socializing resumed.

But sales in China, the world’s biggest luxury goods market, have plummeted this year as a new wave of strict COVID-19 lockdowns closed stores, curtailed demand, and reduced the number of high-spending Chinese tourists in Europe. read more

So as Americans fill transatlantic flights, their drive to cash in on a weak euro is helping to offset the loss of business from the absence of Chinese visitors, who were a major contributor to pre-pandemic luxury sales in Europe.

Luxury goods companies Richemont (CFR.S) and Burberry on Friday reported higher sales in Europe, helping to offset a more than 30% drop in China. read more

France has benefited the most from tourist squandering.

Sales to tourists in France rose just 11.3% in June from 2019 levels, UBS analysts said, a positive sign for French luxury brands that have a big impact in their domestic market.

This week, American tourists have been crowding Paris’s Avenue Montaigne browsing the luxury boutiques that feature designer names like Louis Vuitton, Chanel and Gucci.

Cheryl Penn, 70, a realtor from Delray Beach, Florida, has already bought herself a skirt and stocked up on baby clothes for her granddaughter.

“We just got out on the avenue, so we just started our shopping,” Penn said.

“I like that the euro and the dollar are equal, so I know exactly what I’m spending on,” 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 cost 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 for a little more. $9,000, including thanks to VAT refunds.

“You can go to Europe, experience 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, saving a total of $8,000 over the previous one. year. US prices based on her calculations.

Monica Arora, founder of pursebop.com, a news and information website for luxury brands, said she believes brands eventually “harmonize” prices.

“They have done this many times before,” she said.

In May, Chanel told Reuters that it could continue raising prices in July to account for currency fluctuations, especially the weakening euro, and inflation. read more

The pull of Paris remains strong for American shoppers, even as New York’s high-end shopping streets teem with luxury European designer brands.

“Many of my friends are taking small weekend trips to Paris and other places more than ever and they go shopping while they are there – because that is what you do while you are in Paris,” she said. Jennifer Tampowski at the Gucci flagship store. on Fifth Avenue in New York.

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Reporting by Lea Gedge, Doyinsola Oladipo, Gigi Zamora and Mimosa Spencer. Editing by Jane Merriman

Our Standards: Thomson Reuters Trust Principles.

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