Luxury spending takes a beating in China. Louis Vuitton to shut down three stores

If the recent economic slump and the fierce anti- corruption movements by the government weren’t fuddling enough, China may now witness a luxury goods slowdown too with major luxury labels considering a partial operational back out, thanks to the country’s recent political and economic havoc. While Louis Vuitton has been a top trending brand in China for years, the luxury label is reportedly reconsidering its expansion strategy in the country, already shutting shop in each of the cities of Guangzhou, Harbin, and Urumqi.

If we place reliance on the on-going deliberations, 20% of the LV stores will face a shut down by mid of next year in China, with the three closed out stores only marking a start of the brand’s downfall in the country. Vuitton is also said to make this move to curtail the brands exposure in China, as consumers are largely moving to Japan and Europe for their luxury needs, being lured by the weakening Zen and Euro. However, defending the news as ‘simply not true’, LV’s spokesperson solicited the brand’s move as one for better optimization with an ongoing search for better venues in the country.

While the slowing Chinese economy is to be blamed at large for the drop of luxury sales, (with an expected growth rate of as low as one percent), LV is also owes its suffering sales to over exposure. Once perceived as a luxury for few, it is now seen by many as an over familiar name which is unfit for the elite class. While the brand plans to close operations where it has two stores in second tier Chinese cities’, it recently opened two new stores in Beijing and the coastal city of Hangzhou, leaving strategists confused. Thought closing operations maybe be temporary, LV, along with other luxury labels are surely re-viewing their operating strategies in the wake of the country’s ‘hay wiry’ economy.

[ Via : Businessoffashion ]

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