French luxury store Galeries Lafayette, China, closed its first flagship store in ’ on Wednesday (May 27th), thirteen years after its opening. The retailer cited falling sales in recent years as the reason for its closure.
While the luxury market experienced strong growth in the middle of the 2010’s, especially thanks to the rise of the middle class, the Covid-19 pandemic and the real estate crisis in China’ became a turning point that suddenly stopped domestic consumption of China’, forcing the industry to adapt to new economic realities.
“ChinaWe have been seeing growth in the luxury industry in ’ for ten years. Over the years, the Chinese consumer has matured greatly. Now they understand luxury consumption and brands much better. They became familiar with this world, and their tastes became more refined and sophisticated.”Lisa Nan, editor of Jing Daily’, explains this.
“When we look at today's young consumers, we can now see that not only brands, but also immersive pop-up stores and many marketing initiatives in China’ can be of interest.He adds.
Lisa Nan said the French retailer has already announced its intention to reassess its entire real estate portfolio in China’. “So I think this decision is more about an internal selection because the positions of these areas were quite unfavourable.”Before adding it, he says: It is true that the retail industry faces a major challenge in China“, and this applies not only to Galeries Lafayette, but also to Lane Crawford.’
The presence in China’ remains strong
On Tuesday, the day before closing, a steady flow of customers took place to capitalize on the latest offerings as employees collected unsold products and mannequins.
Qian Linlin, who works in finance and whose office is only a few steps away from the flagship in Beijing’, said she was surprised to learn that the store she visited occasionally during lunch breaks closed. “ I realized there weren't a lot of customers, but I never thought it would suddenly close down one day.”He said it. “ was an iconic building when it first opened, and we young people used to come here for shopping. All we can do now is hold on to those memories. - ”
Located three kilometers west of the Forbidden City, this six-story 48,000-square-foot store was stripped of bags, clothes, shoes and children's toys before closing its doors indefinitely.
But Galeries Lafayette China does not permanently leave the capital of ’. “Don't worry, this isn't goodbye. See you soon Beijing”The French group wrote in a statement. On the contrary, the retailer now plans to offer more functional stores with a greater focus on brand and product selection.
“Consumers' expectations for the traditional department store model have changed significantly. Modern shoppers are increasingly choosing comfort, better quality service, more meaningful experiences, and a stronger sense of well-being.”The group also wrote in a statement.
Galeries Lafayette also emphasizes that this closure does not lead to questioning its presence in China’. Shops in the special administrative districts of Shanghai, Shenzhen and Macau will remain open.
