Europe store closures and Asia expansion: Paul Smith’s survival strategy

What happened On Wednesday, Paul Smith, creative director of his eponymous label, gathered invitees to present Fall 2025 in his office on Rue des Archives. In an effort to cut back on costs, the presentation was notably more intimate, with Paris Fashion Week arriving at a challenging time for the company. The long-established British menswear brand Paul Smith reported a pre-tax loss of $6.5 million (47.6 million RMB) for the 12 months ending June 30, 2024 — a notable increase from the $2.8 million loss reported the previous year. This marks the brand’s fifth consecutive year of financial losses. Along with these disheartening figures, the brand also experienced a decline in turnover, down 7% Year on Year to $243.4 million. In terms of retail results, the company reported a 13% decrease in wholesale revenue. Paul Smith’s rather large retail footprint around the world is also being forced to slim down. Due to weakened foot traffic, the brand closed six stores in the financial year, including locations in Leeds, Hamburg, Paris, Milan, and Berlin. However, Q4 saw the opening of a Shanghai flagship, as well as an exhibition celebrating 60 years of Paul Smith tailoring in Tokyo, which ran for four days in October to accompany the Fall 2024 collection. Since the pandemic, the British label has not had an easy ride. It has been reliant on the success of wholesale and retail footfall, both of which are now also struggling. With leading British brands like Ralph & Russo, Matchesfashion, and Ted Baker facing significant financial struggles and restructuring in recent years, 2025 is shaping up to be a crucial year for Paul Smith. The Jing Take At this moment, the brand is unlikely to enter administration, particularly due to the sale of company properties to offset losses and stabilize its finances. A Paul Smith spokesperson told Jing Daily in an email, “Despite challenging trading conditions, we maintain a healthy balance sheet and are not reliant on bank funding. In addition, our Christmas trade was pleasing, with total retail sales in December up 17% on the prior year.” On the subject of retail, the spokesperson added, “Our e-commerce channel performed exceptionally well, up 58% on the prior year. We remain cautiously optimistic about trade for the year ahead despite the headwinds facing the industry and wider economy.” This increased focus on e-commerce could be a fruitful strategy for the company, especially given the declining footfall in Europe. However, due to China’s love for experiential concepts and physical brand engagement, there remains a need for a strong brick-and-mortar presence across the mainland. Paul Smith’s store expansion in Asia, including the new flagship in Shanghai, demonstrates how the company will be courting China to explore new areas of business growth. To revive the brand’s trajectory, marketing efforts should be more focused on Gen Z. The British brand boasts a storied heritage and durable craftsmanship that young luxury consumers are seeking, yet it has not won a viral moment on social media in recent years. As a mid-tier luxury brand offering accessible price points and discounted items, Paul Smith should be snapping up Gen Z through innovative KOL partnerships, gamified pop-ups, meme moments, or social media marketing that leverages the subcultures prevalent within this young demographic. That said, Paul Smith is a treasured brand with over five decades of business under its belt, having showcased at Paris Fashion Week since 1976. With a retail presence in Japan since 1984 and in China since 2004, the brand’s iconic multicolored stripes are universally recognized. This level of recognition provides a strong foundation for a brand revival, offering plenty of potential for Paul Smith to bounce back from its recent losses. 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.

Paul Smith shows at PFW despite losses

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Paul Smith shows at PFW despite losses