Louis Vuitton struck by China's luxury dip and shutters stores

Louis Vuitton has "strongly denied" reports that it is set to shutter up ot a fifth of its retail network in China. "As announced by LVMH Group many times, Louis Vuitton’s retail strategy in China is to optimize the quality of its store network," said the fashion house in a statement to WWD. "Our aim is to offer the best service and experience possible to our clients in China."

Louis Vuitton noted that it occasionally shuts stores to open in better locations, relocates other stores and renovates older stores. Four store openings, two of them renovations, are slated for 2016 but overall the company expects its store network in China to remain flat.


Luxury fashion house Louis Vuitton has shut three of its stores in China and is set to close several more stores across the country over the next few months as more affluent Chinese consumers take their shopping abroad, where prices are often lower.

According to the Financial Times, the store closures, which include Louis Vuitton first store in the southern city of Guangzhou, stem from China's ongoing luxury slowdown that has been struck by a slowing economy and three year anti-corruption and anti-gifting political campaign. "According to my information, 20 percent of Louis Vuitton’s stores in China will have disappeared by mid-next year: that is a closing rate of about one store per month," said Emmanuel Hemmerle, managing partner at Emmanuel Hemmerle, a leadership consulting company based in Shanghai to FT.

With stores shut Guangzhou, Urumqi and Harbin, Louis Vuitton currently operates approximately 50 stores throughout mainland China, with a number of them in smaller cities hit by the economy slowdown. It is within these smaller cities, where Louis Vuitton has two or three stores, that the fashion house to closing it does. "We may be closing down a couple of stores in China where we have two stores in second-tier cities," said Jean-Jacques Guiony, chief financial officer of LVMH, parent company of Louis Vuitton during a sales call last month. month

Nevertheless, the store closures come after Louis Vuitton stated on Monday that it would "continue investing in China in the current store network in order to enhance the level of experience we wish to offer our clients." The luxury label noted that in spite of the store closure it had opened a new store in Beijing an another in Hangzhou earlier this year.

 

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