Luxury Brands Such As Hermes Have Been Evacuated From The Chengdu Market.

From the 2015 market performance of luxury brands, it is easy to see that only a small number of luxury brands achieve profitability, most of the brand performance is showing a downward trend.

The performance of luxury brands in the Chengdu market is only a microcosm of the Greater China region.

Just a few months, including Dior, Gucci, Fendi, Hermes, Cartire, Bvlgari and other international luxury brands have been withdrawn from the shop, or evacuated.

Or another new home in Chengdu.

What is interesting is that the shops that these luxury brands have withdrawn are located in the core of Chengdu's Chun Xi business district, where Dior closed its store in Chengdu's Renheng land Plaza by the end of last year, while Gucci Chengdu Renhe Spring Department store has now removed all its products.

The performance of Chengdu's market withdrawal is only a microcosm of the Greater China region.

Earlier, the "off shop plan" of luxury brands in mainland China has quietly started, and the trend of closing stores has become increasingly evident in recent years.

Forbes statistics show that apart from LV, the number of luxury brands such as Prada has also dropped by 3 to 5 in mainland China.

According to incomplete statistics, between 2013 and 2015, BURBERRY closed 4 mainland stores, COACH closed two, Hermes closed one, Armani 5, PRADA changed from 49 to 33, LV2015 closed 3 Chinese branches, and LV will cut 20% stores in China in 2016, equivalent to about 10 shops.

Behind the strategic contraction is embarrassing performance.

In fact, luxury goods have been hit hard in the Chinese market in recent years. Now, blindly expanding luxury brand stores now also choose to reduce stores or slow shop plans.

Behind this, the sharp decline in purchasing power has led to a sharp decline in performance.

Public information shows that

In its third quarter earnings report of 2015, Kering revealed that the group's total revenue rose by 12%, but the Gucci brand revenue that accounted for 1/3 of total revenue of Kai Yun group dropped 0.4%.

Among them, Asia Pacific revenue fell 17%.

Sales in mainland China are still weak, and sales in Hongkong and Macao are deteriorating.

The Burberry group's retail sales in the first half of 2015 increased by only 3.5%, which was seen as the most negative year-on-year turnover since the third quarter of 2009, which is the worst performance in 6 years.

German Hugo boss Hugo Boss group's third quarter net profit fell 23%, Hugo Boss in the third quarter revenue grew 4% to 744 million 100 thousand euros, fell serious areas including the Americas and the Chinese market.

Italy luxury group Prada declined net profit in the 9 months ended October 31, 2015, with net profit of 235 million euros (US $258 million 100 thousand), down 26.4% from the same period last year, and operating profit of 373 million 900 thousand euros (US $410 million), down nearly 25% from the same period last year.

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From the 2015 market performance of luxury brands, it is easy to see that only a small number of luxury brands achieve profitability, most of the brand performance is showing a downward trend.

The most direct impact of the decline in performance is that the group will reduce the number of stores and postpone expansion to reduce losses.

Adjustment of business pattern

In order to ease the downward trend of performance, it is usually one of the main measures to deal with luxury brands by optimizing store configuration.

At this time, they tend to choose shopping centers or business circles where people gather.

Of course, the location of each brand will be measured by the flow of people, while some of the earlier high-end shopping centers in Chengdu have gradually lost their attraction in the renewal of business circles, such as renhang land in Chengdu's core business circle and Chengdu Renhe Spring Department store.

With the rise of IFS and Ocean Pacific, the business structure of Chengdu has changed.

More and more luxury brands are concentrated in IFS and oceanic Taigu. Among them, the first Herm s s flagship store in Southwest China, the first flagship flagship store in China, and the new flagship store in GUCCI are located in Ocean Pacific.

In my view, the cluster effect of luxury goods business with high-end consumer groups as the main target customers has become increasingly prominent. "Choosing neighbors" has obviously become the primary consideration for the location of these big names, and the platform that converge high-end customer resources can produce greater value and benefits.

First tier brands tend to be more rational

Luo Yanqiu, deputy director of the International Service Department of Gao Li, seems to have three main reasons for closing the store.

First, the significant decline in the performance of luxury brands, some brands are less dynamic than before, while the demand for new high-end consumer groups is not clear. Some of the sub cards have surpassed the main brand and the brand structure of luxury goods group is facing adjustment.

Second, before the luxury group opened shop in the past few years, under the current market environment, some of the stores that no longer have obvious competitiveness will be gradually closed. This is the problem of luxury group's own network planning.

Third, some brands are facing a dilemma in their commercial projects. Due to the impact of the real economy in winter, some owners of commercial projects shift their owners as a whole, and the management side changes. At the same time, because high-end brands need to protect their own scarcity, they will choose to shop cautiously and retain their competitive stores only if their owners or business conditions are bleak.

At the same time, Luo Yanqiu also pointed out that in the future, under the environment of the overall high-end market downturn, the international first-line brand will continue to be rational, and the closing of the luxury goods group will happen again.