Galeries Lafayette
A six-story, 48,000-square-meter shopping mall in Beijing ceased operations today, May 27. The company explained the decision by a drop in sales amid slowing consumer demand in China, Euronews reported.
The closure was symbolic for the entire luxury sector. In the mid-2010s, China was considered the main driver of the global luxury market: the rapidly growing middle class actively bought premium brands, and international chains one after another opened flagship stores in the country’s largest cities.
But after the Covid-19 pandemic and a prolonged real estate crisis, the situation changed dramatically. Consumers have become more cautious, and shoppers themselves have become much more demanding.
“The Chinese consumer has matured a lot. He has a better understanding of luxury brands and his tastes have become more refined,” explains Jing Daily editor Lisa Nan.
According to her, young audiences today are no longer attracted to the brands themselves, but rather to colorful pop-up spaces, digital formats and immersive experiences. Traditional department stores are losing their former appeal.
The expert also noted that Galeries Lafayette had previously announced its intention to revise its real estate portfolio in China. In her opinion, the decision is related not only to the crisis in the retail industry, but also to the company’s internal strategy, including the choice of retail locations.
At the same time, it is not only the French chain that is experiencing problems. Other players in the premium segment, including Lane Crawford, are also feeling the pressure on the market.
Despite the closure, the flow of visitors to the Beijing store did not stop during the last hours of operation. Shoppers rushed to take advantage of discounts while staff packed up the remaining merchandise, mannequins and displays.
The flagship store was located about three kilometers from Forbidden City and for many years was considered one of the most visible symbols of the presence of European luxury in the Chinese capital.
