Luxury Goods Are Left Behind, LV And Prada Are Closed.

Recently, the rent in the mainland and Hongkong has risen, and the market has been sluggish.

Sales are more and more difficult, although Chinese are still "luxury buyers" in the global luxury market, but because of many factors, luxury products are not sold well.

In the global luxury market, in 2014, the total amount of gold hit by consumers in mainland China rose by 9%, to 380 billion yuan, accounting for 30% of the global luxury market share. However, such as anti-corruption, overseas consumption, purchasing and other reasons, the Greater China luxury market was frozen.

Bain's "2014 China luxury market report" showed that the mainland China's luxury market for the first time showed negative growth in 2014, down 1% from 2013.

In the first half of this year, this trend continues to ferment.

In the latest quarterly earnings report, China, especially Hongkong and Macao, has become a headache area.

COACH, who has just released its earnings report, said that Hongkong and Macao were affected by a significant decrease in the number of mainland tourists and weaker sales performance. This affected the growth of China's regional growth for the first time in the fiscal year COACH2015 to a single digit increase of 9%, while the four quarter growth was only 5%. Burberry also showed that the signs of Hongkong's market weakness were not improving at present, so the group issued an early warning in May, and the Hermes group also said Hongkong and Macao were still in "difficult circumstances".

"In the hearts of Chinese luxury consumers, Hongkong is losing the status of Asian luxury goods centers". Analysts believe that in the next few years, Hongkong will face a series of luxury stores such as LV, Gucci, Prada and so on.

Bruno LAN, Bain's global partner, predicts that luxury brands will continue to adjust their distribution in 2015, including closing discount stores and authorized stores.

Zhou Ting, President of the Institute of wealth and quality, also thinks that the trend of luxury stores will continue in 2015. "Some stores are not performing well, and too many stores have little effect on performance improvement, but they have to bear more costs, and the need to pform traditional stores' sales channels is the reason why luxury brands are closed," she told the first financial daily.

Luxury brand strategy focus migration

As mainland China's turnover declined,

Jean-Jacques Guiony, chief financial officer, said in a conference call: "taking into account the price problem, the company will shift its focus from mainland China to other regions, such as Japan and Europe, which are more likely to benefit from these two markets."

At the same time, LVMH also joined other luxury goods groups to renegotiate the rental price with Hongkong owners.

In addition to closing some of the physical stores, luxury brands are adjusting their strategic priorities in China.

A major trend is that with the pressure of same store sales (the average sales of many luxury brands and stores in 2014 declined by 5%-6%), traditional luxury brands are relatively conservative in the expansion of new stores, and brands adopt stricter store selection criteria. They focus on opening or refurbishing the larger flagship stores, while closing the smaller satellite stores in the lower tier cities.

Bruno Lan said.

"We have slowed down the expansion of new stores, and are now decorating and closing many stores and shifting their focus from the three line market to the second tier market."

A luxury brand executive said.

Another trend is that luxury shopping centers pay more attention to the concept of lifestyle consumption.

In order to cope with the increasing competition pressure of the electricity supplier and the declining trend of the Luxury Retailing industry, the entity shopping center has provided more stores related to the consumption of life.

"Under the influence of the electricity supplier, luxury brands must consider the adjustment of online and offline channels, including the adjustment of the most price system and retail mode," Zhou Ting said. "Now is not the era of winning more stores, so some luxury brands are replacing the original stores through new sales channels.

She believes that luxury stores will be synchronized with the expansion of different types of brands that are more accessible to consumers.

For example, Gucci recently opened a restaurant in Shanghai, and LV opened a new store in West Lake scenic spot in Hangzhou. "The original traditional shop form is hard to attract more consumers. Luxury brands are using the restaurants, hotels, scenic spots and other ways to reach consumers."