Burberry closed the doors to its flagship store in Shanghai on March 31st, according to local media accounts, as the brand that made trench coats trendy shuttered its fourth shop in China’s commercial capital within the last eight months.
By April Fools Day Burberry’s 1,000 square metre (10,764 square foot) store at the L’Avenue shopping centre in the Gubei area had closed its doors, after months of close-out operations according to eyewitness accounts.
The latest shutdown left Burberry representatives struggling to explain an apparent retreat from a market which had once been a focus of its global strategy as the London-based brand restructures globally.
Half of Shanghai Shops Now Closed
Burberry’s closing at L’Avenue is the latest in a series of Shanghai shutdowns for the plaid-accented brand following just one month after it shuttered locations at the Westgate Mall on West Nanjing Road and at Hongqiao airport, according to local media accounts. In August last year the plaid brand closed its venue at New World’s K11 mall on Huaihai Road in the city.
The two-storey L’Avenue shop had originally opened in 2013 and shortly thereafter was the site of an “Art of the Trench” event led by Burberry spokesperson Cara Delevingne. The company reportedly flew in more than 450 guests, including Bolin Chen, Denise Ho and Du Juan, for the social affair celebrating the company’s famous outerwear.
Burberry’s website still lists Shanghai locations at the Jing’An Kerry Centre, Plaza 66, the New World Department Store on East Nanjing Road and at the Grand Gateway in Xujiahui.
Since last year Burberry’s global CEO Marco Gobbetti has been executing a strategy of closing down retail locations with the company closing seven stores globally in the second quarter of 2018. Analysts at Merrill Lynch earlier this month downgraded Burberry’s stock to underperform due in part to reduced demand for the company’s products, and for luxury goods in general, in Asian markets.
Despite the retrenchment Burberry representatives indicate that the brand is not calling it quits in mainland China.
“China is an extremely important market for Burberry, and we are fully committed to developing the country for the long term,” a company spokesperson said in comments cited by mainland news site Jiemian.com.
“Burberry is not so much closing down as relocating to new stores,” Ellen Wei, JLL’s head of retail for China, told Mingtiandi.
She noted that the fashion label will soon open new locations in IFC Mall in Lujiazui and IAPM in Xuhui District, a plan which aligns with those of many luxury brands which have prioritised openings in Shanghai’s prime shopping hubs including West Nanjing Road, and Huaihai Road.
Wei added that in the last year, the retail industry in China’s largest cities has stablised, and that in order to reach their growth targets, many retailers are looking for opportunities to expand into “tier-1.5” and tier-2 cities.
In 2010, Burberry had paid £70 million (now $91.4 million) to buy out its Chinese franchises, at a time when global luxury brands were just beginning to feel the force of China’s frenzy for luxury.