It isn't just Macy's and Sears that have too much real estate.
After decades of opening stores as a means to fuel their growth, a new report has concluded that high-end retailers need to pump the brakes on their expansion plans. In some cities, they'll even need to close some of their existing locations.
According to The Boston Consulting Group, a triple threat of headwinds has led to a slowdown in the personal luxury goods market. Namely, consumers are shifting their spending toward vacations and wine; the internet is grabbing a larger chunk of spending; and China's red-hot growth is settling in at a more moderate pace.
Whereas sales of apparel and other personal luxury goods grew at a 9 percent compound annual rate from 1996 to 2001, they're expected to gain between 2 and 4 percent from 2015 to 2022, according to BCG's report.
"We are living right now the first slowdown [in the luxury market]," Olivier Abtan, a partner at The Boston Consulting Group, told CNBC.
One of the biggest changes in the way affluent consumers spend their money is their preference for fine dining and excursions. That shift started about 10 years ago, but has recently accelerated, Abtan said.
From 2014 to 2015, revenues in the experiential luxury segment grew 4.2 percent, to 522 billion euros ($560 billion). Over that same period, the personal luxury goods market grew just 1.6 percent, to 323 billion euros. Spending on experiences is prevalent among both older luxury shoppers and millennials, Abtan said.
Millennials are also changing the way luxury goods are sold by demanding these brands have a presence online, Abtan said. Meanwhile, the slowdown in Chinese luxury spending has pressured revenues.
All of these factors have led to store closures at the high end, impacting brands from Burberry to Ralph Lauren. In November, Kenneth Cole announced that it would shutter all of its outlet stores. But further closures are likely, particularly in Asian cities, BCG concluded. Tokyo, Hong Kong and Beijing are among the international markets that have too many luxury stores, according to the report.
"The growth is still there, but it's not [as much as] you expected, so you are saturated with luxury stores," Abtan said.
That doesn't mean expansion is over. There are still opportunities for established and emerging luxury brands to grow their store footprints. That's true even in New York City, where vacancies have plagued Fifth Avenue.
But the role of the store has to change, and channel these brands' storytelling and heritage, Abtan said.
"They have to transform their stores," he said.