Luxury retailers around the world are rushing to retreat from China by closing their shops in luxury shopping malls in major mainland cities. Consumers are cutting spending, and analysts warn that sales of anemia are likely to last this year.
French luxury group Kering closed two Gucci stores in Shanghai last month. It has been closed at the rail department stores near the landmarks Jing’an Temple and New World Daimaru, located on the busiest shopping strip in the city, after over a decade. Prada has ended its two-year existence at the city’s Hong Kong International Airport.
According to data compiled by industry tracker linkshop.com, they were closed twice in the last quarter by all luxury retailers, including brands such as Louis Vuitton, Chanel, Tiffany & Company and Bvlgari.
“Most brands have seen a sharp decline in sales in mainland China, not only affected by (depressed) consumer sentiment at home, but also influenced by Chinese citizens who shop more overseas,” said Jelena Sokorova, senior equity analyst at Morningstar.
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What does it take for foreign brands to flourish in China today?
What does it take for foreign brands to flourish in China today?
Kering and Prada did not immediately reply to emails seeking comment, but LVMH declined to comment.
To emphasize the urgency, Beijing prioritized “increasing consumption” as its biggest policy agenda at this week’s National People’s Assembly. This doubled the state subsidies for consumer finance purchases this year to 300 billion yuan (US$41.4 billion).
