French Department Store’s First Asian Location To Debut In Beijing’s Xidan Shopping District
Last week, the 2011 Xidan International Fashion Gala kicked off at Beijing’s Seasons Place mall. Designed to promote and discuss the development of the city’s Xidan shopping district, the event featured high-profile speakers and a couple of interesting announcements, not least of which were new details about the return of the Parisian department store Galeries Lafayette to Beijing after a 14-year absence.
During the gala’s opening ceremony, Paul Delaoutre, CEO of department stores at Galeries Lafayette & BHV, said “the fashion market is taking shape in Xidan, and Galeries Lafayette is happy to join the process and help enhance the shopping experience.” Added Delaoutre, “The Beijing store will be an essential part of our long-term development plan.” District commerce official Wang Fujun noted that the upcoming Beijing location will be the first Galeries Lafayette in Asia, and will open before 2013. Indicating the hopes that local officials are placing on the transformative effect of the new store, Wang Shuxia, director of Beijing Commercial Information Consultation Center, said that Galeries Lafayette Xidan will make the shopping area “synonymous with fashion.”
As in other major consumer markets, in China location is everything. Jing Daily has previously looked at the proliferation of established luxury brands in the China market over the past decade. For any luxury retailer, identifying the target city (top-tier or second/third-tier), and most prosperous business districts are critical steps. However, the seemingly overnight development of new commercial areas means that finding the right location can be tricky business in China. This is something Galeries Lafayette learned first-hand on its initial foray into China 14 years ago.
In 1997, Galeries Lafayette made its debut on Beijing’s Wangfujing Street, one of the city’s most established shopping districts. After less than a year of disappointing sales and consumer indifference, however, the location was shuttered. Since the failure of the first Beijing location, Galeries Lafayette has been slow to give China another shot. However, the company has recently had a change of heart, and like Gucci–which recently made a low-key return to Guangzhou after a similar failure seven years ago–it’s ready to try again. Compared to Gucci’s new Guangzhou store, which opened to little fanfare, Galeries Lafayette plans to make a far more extravagant (re)entrance. The upcoming Xidan location, at 18,000 square meters, will be the group’s largest after its flagship Paris store at Boulevard Haussmann.
Speaking to Beijing Business Today, Galeries Lafayette CEO Delaoutre said that luxury consumption in Beijing has increased rapidly over the past three years, particularly in the wake of the 2008 Olympics, and that the city was identified as the most attractive market by the group’s site selection committee. With brands like Louis Vuitton, Gucci, Loewe and others having set up shop in Xidan, Delaoutre added, the Galeries Lafayette group felt the area now shows “tremendous business opportunities.”
Still, Galeries Lafayette learned its lesson on its last, ill-fated China adventure. To reduce risk exposure this time around, the group formed a joint venture with the Hong Kong-based retail powerhouse I.T Limited to work together on the new Beijing location. With the support of Xidan commercial authorities, an experienced partner like I.T and a red-hot Chinese luxury market, Galeries Lafayette could see a far different reception in 2013 than it did in 1997. However, it won’t be a cakewalk. Though Beijing’s consumer market is far more developed than it was 14 years ago, it’s also far more crowded. With the Chinese capital teeming with malls like Seasons Place and Sanlitun Village, Galeries Lafayette will have to aggressively work to differentiate itself in Beijing while more strongly marketing itself to visiting Chinese tourists in Paris.
Considering Chinese shoppers purchased more than half of their luxury goods overseas last year, there is perhaps no better advertisement for Galeries Lafayette in Xidan than Galeries Lafayette in Paris.