The article talks about the brand communication and marketing that these stores are meant to generate. And the possible sales, of course: "The longer you can keep potential customers in the store, the greater the chances of them spending money."
But the article also says these shops run the risk of losing their platinum polish of exclusivity by appealing to a broad audience. Perhaps the author hasn't gone shopping lately. Karl Lagerfeld, Stella McCartney, and now Viktor & Rolf have all made fashion appearances at H&M. Isaac Mizrahi at Target. These are all exclusive labels that have been sold at mass retailers. Turning it around and inviting the masses to a designer shop seems the logical next step.
Moreover, I think the author misses the point by not acknowledging that these shops have also become tourist attractions. Louis Vuitton's Champs Elysees shop has gotten so much coverage from travel writers and fashion magazines, talking not only about the goods for sale, but also the sundry extra features. For tourists seeking the Paris shopping experience (and who isn't?) visiting the Louis Vuitton boutique is as much a destination as the Arc de Triomphe, just a few blocks away. And when you've got vacation money burning a hole in your pocket, and you want to bring back something special for mom, what better than an LV bag directly from the flagship?