The Bund, Shanghai’s waterfront district famed for its many western-style establishments, is seeing an exodus of luxury brands such as Hugo Boss and Giorgio Armani, China Business News reported Wednesday.
Once teeming with shoppers eyeing the coveted products of foreign brands, the Bund is no longer as hot as it used to be.
There are several reasons for this trend. For one thing, consumer interest in high-end products is on the wane. But the number of shopping malls in the city is on the rise, which means more competition.
Top brands such as Hugo Boss, Dolce & Gabbana, and Patek Philippe have left one after another. The flagship store of Giorgio Armani, a fixture on the Bund for 10 years, has also closed shop.
The Bund remains a popular place for tourists but the fact is many of them do not have deep pockets. Coffee shops are still crowded but luxury-brand stores look desolate.
Du Bin, a director at property consulting firm RET, said it is now rare to see tourists spending a fortune in shops at the Bund. And low customer traffic means low income.
In Nanjing Road, Shanghai’s most crowded shopping district, top brands such as Gucci can make more than 1 million yuan (US$161,998) in revenue a day, compared with only 100,000 yuan for brands of a similar class in the Bund, the China Business News report said. However, store rent per square meter in Nanjing Road is only 20-30 yuan, compared with 30-40 yuan in the Bund.
Meanwhile, shopping malls like L’Avenue in Changning district and K11 in Huangpu district, where rents are cheaper, have attracted top brands, further hurting the Bund’s ability to pull in customers.
Xie Chen, a research director of property consulting form CB Richard Ellis, said new shopping centers no doubt have put great pressure on store operators at the Bund.
According to data from Shanghai Commercial Information Center, revenues of shopping centers located in suburban areas grew 17.4 percent in 2013 compared with only 3.2 percent growth for those downtown.
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