Burberry Shanghai'S Great Retreat In China

March 31, 2019: the flagship store of the British luxury brand located in Shanghai's SHANG Jia center today opened on the last day. The store opened in 2013, witnessing the Burberry's decline in China. The closure of the store is also a landmark event of the great retreat of Shanghai stores in British companies.

Earlier this month, British insiders told the no fashion Chinese net that the group would close the store in Shanghai's SHANG Jia center and the fourth store closed by Burberry Group PLC (BRBY.L) Boboli in Shanghai, which means that the company continued to lay off employees in disguised form until 7 employees left before it closed.

In the middle of this month, the Chinese public relations agency of the Asia Pacific region replied that it was a normal operation adjustment after the mail and telephone verified the British company. In the middle of this month, the company did not want to answer directly whether it was about to close the flagship store in Shanghai's SHANG Jia center.

SHANG Jia center is a luxury gathering place in Hongqiao Business District of Shanghai. Louis Vuitton Louis Weedon, Dior Dior, Celine Selin, Ermenegildo Zegna Zegna and other luxury brands occupy the main position on the first floor, and even Loro Piana has stores here.

On Sunday, no fashion Chinese network visited Burberry flagship store in Shanghai's SHANG Jia center. The 1000 square meter two storey shops were pulling away, and there were only two men and two women.

In the negative space, more than half of the shelves have been emptied, and there are non salesmen in the warehouse cleaning up.

Subsequently, a negative layer of female sales said that today the store will be completely evacuated.

According to sources, after the closure of the store, all employees are expected to be dismissed, and in the middle of this month, when replying to the absence of the Chinese fashion website, the Asia Pacific public relations agency of the British company also did not respond positively to the layoffs.

Before the closure of flagship store in Shanghai's SHANG Jia center, Burberry closed a double deck boutique in Huaihailu Road in August last year. At the end of February, the brand closed the Shanghai Meilong town square children's clothing store in Nanjing West Road and the boutique of Hongqiao airport in Nanjing West Road.

At present, the flagship store of SHANG Jia center is still on the list of shops in Shanghai on Burberry China's official website. The other four are four stores in Jingan Kerry Center shopping mall, Hang Lung Plaza children's wear boutique (temporary store), new world big pill department store and Hong Kong Hui square.

This means that in the past six months, Burberry has closed half of the shops in Shanghai.

In 2010, Angela Ahrendts, the chief executive of Boboli group, decided to withdraw the right to enter the Chinese market, and quickly adjusted the concept of stores and expanded the network of stores to make the Great China market flourish.

However, in the 2012, the decline of luxury goods was also a disaster. With the slow down of China's anti-corruption and economic growth, especially the weakness of Hong Kong and Macao's luxury market, the Boboli group encountered Waterloo in the Chinese market.

In the first half of 2012-2016 years, during the four and a half years of recession in the luxury industry, the Boboli group encountered unprecedented difficulties. In particular, Angela Ahrendts switched to Apple Inc. (NASDAQ:AAPL) in 2014, as a senior deputy general manager of Apple Corp retail and online stores. After the group's chief creative officer ChristopherBailey became chief executive officer, the British brand was completely struggling in Ahrendts.

With the announcement of the appointment of Gerry Murphy as chairman of the board in April last year, the British group has changed dramatically from the chairman, chief executive officer, chief creative officer, chief operating officer and chief financial officer to all core management positions.

Due to management changes, in the second half of 2016 to 2018, for two and a half years, the luxury industry led by Gucci Gucci rebounded, but Burberry failed to benefit from it. It was a big traditional luxury brand that only performed better than Prada SpA (1913.HK) Prada group.

Despite the fact that Burberry has been trying to please the Chinese market and Chinese consumers, starting from the fashion show in China in 2014 and opening the online flagship store at Tmall Tmall.com, the more Burberry the Chinese consumers who love the "colder" character luxury, the more they lose their spending base.

In 2014, Burberry Tmall store encountered great controversy. The luxury industry almost unanimously denied it. Even though today's luxury industry attaches great importance to online channels and marketing, so far, the traditional first-line brand in China's third party online platform is still only Burberry.

At the beginning of this year, Burberry released the first Chinese Spring Festival theme advertisement. The brand new ambassador, Zhao Wei and Dongyu Zhou, delivered the theme of "Reunion" in Chinese Lunar New Year. The advertisement was presented in the form of a family portrait in an informal urban environment.

After the exposure of the advertisement, the social media again aroused controversy. The advertising blockbuster was turned into a "palace play" by PS. Chinese netizens and consumers did not pay for the British brand.

In the middle of this month, Burberry held an event in Shanghai's Boheng 55 villa. A large number of VIP were invited to the site. It was reported that only two hundred days were sold for hundreds of thousands of yuan.

Data released at the end of January showed that the growth of weak retail sales slowed down again during the pition period of product upgrading.

In the three quarter of December 29th, boboley realized retail sales of 711 million pounds, 1.1% less than the 719 million a year earlier, and a fixed exchange rate of 2%.

Same store sales recorded a growth of 1%, less than 2% of market expectations, or 3% of the one or two quarter.

The management did not provide specific data for each market. It only pointed out that the Asia Pacific region benefited from the median digit growth in the mainland of China. Tourist consumption of EMEIA increased and the trend of American passenger flow was weak.

In the hands of the competition that has announced annual results, Gucci Gucci and Louis Vuitton Louis Weedon recorded high double-digit growth throughout the year, Herm sInternational SCA (HRMS.PA), Hermes International Group also had a fixed exchange rate growth of 10.4%, and even Prada group, whose profits declined, recorded a fixed exchange rate growth of 6% last year.

Julie Brown said sales of the group for Chinese people worldwide increased slightly.

She pointed out that because of the weakening of the renminbi, more and more Chinese people are willing to stay at home shopping, while the number of Chinese tourists in Hongkong, Japan and Korea has declined.

Although these trends are very common in the luxury sector, the growth in the Chinese market basically offset the slowdown in the European and US markets, except for other major competitors outside Prada group. The US market has been criticized by investors for its two core market weaknesses due to its wholesale business.