What Happened? Virgil Abloh-founded Off-White shutters another store, having closed four stores across Chengdu, Xian and Shanghai. On March 14, the brand’s Beijing Sanlitun boutique closed down (leaving the Lafayette store its sole remaining presence in the city), taking the brand’s total boutiques down to five from nine just a few years ago.
Multi-brand sports shoe store Foot Locker is also planning to close down all of its Hong Kong and Macau stores, including one in prime retail and tourist area Tsim Sha Tsui. This is part of Foot Locker’s plan to shut down all 420 of its stores globally by 2026, pivoting away from malls, replacing some with new concept stores, according to CEO Mary Dillon.
The Jing Take: Physical retail in Greater China can offer huge opportunities for overseas brands to connect with local consumers. But to drive footfall and retail, expect to invest heavily in localized content, marketing and activations as well as high property rents in star locations. After a few tough pandemic years, struggling retail and lockdowns, many brands are finding the high investment in physical stores too tough to take.
Off-White is one such example. While the streetwear-luxury hybrid label garnered good brand recognition when launching in China in 2017, it hasn’t managed to maintain the hype since, and has also over-invested in rapid brick-and-mortar retail expansion. Foot Locker’s exit from Hong Kong and Macau also goes to show that brand recognition in your home country or the West doesn’t automatically translate to stellar sales in the East.
As many fashion and beauty brands, such as Trussardi, Cha Ling, Marks and Spencer, New Look and Maybelline, have learned the hard way, the streets of China aren’t necessarily paved with gold, pandemic or no pandemic. Brands must constantly revise their retail strategies alongside China’s rapidly evolving marketplace and geo-political shifts.
A highly saturated e-commerce landscape and rising boredom of identikit stores or malls in China also mean that there’s added pressure to create experiential, new and emotional offline retail concepts and connections. Omni-channel activations are even better — linking the online and offline worlds in one fluid experience.
The success of the Gentle Monster model has been telling, and many Chinese brands like Florasis have followed suit with gallery-like, creative, experiential flagships. Recent pop-ups by the likes of Christian Dior, L’Oreal Paris and Vacheron Constantin show how labels can successfully leverage fun, physical presences without the commitment of a permanent store.
The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.