Will Nike Shanghai Nanjing Road Store Lose Profit Growth To Rent Increase?

At present, the Nike store located in Nanjing West Road, Shanghai is still in operation. The storey of the 5 storey building is only one to two storeys open, and the other floors are closed.

With the advent of the new lease agreement, shops in Nanjing road closed.

Yesterday (February 9th), a shop assistant confirmed that the store was about to close, but the exact date was not clear.

From Nike, the store was forced to close because of the property owner's reasons.

Nanjing Road business circle is constantly upgrading.

Xue Jianxiong, an analyst with Yi Ju, pointed out that

Nike's closing shop is under this background.

The property side of the shop on the 1-5 floor of No. 993 Nike shop in Nanjing West Road is the nine hundred group. The shop was leased to the nine hundred group by Shengyang (Shanghai) Trading Co., Ltd. (hereinafter referred to as Shengyang company), and was subleased to Nike in 2008.

In this area, Shengyang company sublets the shops to all sports brands.

However, with the approaching of the lease time, the rent of the business circle is also rising.

According to an industry source, Shengyang company chose to quit because the rent of shops in the lot exceeded the expectation of Shengyang company.

This statement is more consistent with Nike's reply.

Yesterday, a person in charge of Nike's public relations department said, "Shengyang company has terminated the lease agreement with the 993 shop in Shanghai, Nike, Nanjing West Road, which is leased by Shengyang company and Subleasing with Nike."

Due to the adjustment of Shengyang company's operation strategy, its management team decided to terminate the lease agreement for the entire 993 building in Nanjing West Road ahead of time with the owners.

But whether another new location will be opened in Shanghai, the official said there was no news from the company level.

Profit increase to rent increase?

With the relocation of many mature business circles in Shanghai, the price of the business circle has risen steadily.

"Under this background, the rent increase of Nanjing Road business circle, which is well known, is even more alarming."

Ma Gang, an independent critique of footwear industry, pointed out that for today's sports brand industry, the rate of profit rise has not kept pace with the rents.

This also means that whether there is enough leased capacity will decide whether to continue to survive in Nanjing Road business circle.

Compared with jewelry retail products, the current growth rate of footwear industry is not eye-catching.

According to the latest statistics from Shenzhen, the sales of gold and silver jewelry increased by 52.1% during the festival, 21.5% of food, beverage, tobacco and liquor, 18.2% of clothing and shoes and knitted fabrics, 20.3% of daily necessities, and 45.9% of sales of stationery and office equipment and 28.4% of communications equipment.

The growth rate of shoes and clothing is only about 20%, "Ma Gang pointed out." after upgrading and upgrading, business circle seems to be more suitable for the jewelry industry to enter, and its rental capacity is much higher than that of sports products.

According to Laifang's latest research report, the rental of shops in Beijing and Shanghai will increase by about 15% this year.

Shanghai's retail market continued to show a trend of supply and demand in the fourth quarter of last year. More and more overseas businesses entered the Shanghai market in the fourth quarter, which led to the rapid growth of Shanghai's high-end shops market.

For example, the American leisure clothing brand, Hollister, opened the first mainland store in Raffles square, the Greek accessories brand Liv Li FolliFollie and the flagship store of Italy fashion brand ASOBIO in Nanjing West Road.

"It is becoming more and more difficult to make profits in Nanjing Road business circle". The insiders pointed out that most local brands regard the loss of Nanjing Road business circle as an advertising expense, and more importantly, their publicity role.

"But now the upgrading of business circles has made it difficult for these brands to bear these commercial costs. They should consider the business district with higher cost performance."