French department store chain Galeries Lafayette is closing the doors of its department store in Beijing on Wednesday after 13 years. The reason for this is changing customer demands and a decline in the luxury segment in a country that was once considered an El Dorado.
On Tuesday, the day before the closure, numerous customers flocked to the boutiques of the huge, six-story department store in the heart of the capital in search of last-minute bargains. At the same time, employees packed up the unsold goods and the mannequins. They helped empty shelves of handbags, clothing, shoes and children’s toys before the department store closed its doors indefinitely.
“Don’t be sad, it’s not a final farewell,” the department store said in a message posted on social media in early May. “See you soon, Beijing,” it promised.
In a statement from mid-May, Galeries Lafayette referred to the changing expectations of customers. “Modern consumers increasingly value comfort, first-class service, enriching experiences and increased well-being,” it said. “The company intends to offer more functional and agile stores with a greater focus on brand and product selection,” they added.
Galeries Lafayette management had separately said that the 48,000 square meter Beijing department store was too large to be modernized without major investment.
When Galeries Lafayette opened its first mainland Chinese department store in Beijing in 2013, China was experiencing a period of strong growth in the luxury segment. The rise of the middle class promised new sales markets for brands that had previously been inaccessible to the general public in China. Since then, the Covid-19 pandemic, a profound real estate crisis with serious economic consequences and stagnating domestic consumption have left their mark.
Galeries Lafayette assured that the closure of the Beijing department store does not jeopardize the company’s presence. It operates three other department stores in mainland China in Shanghai (east) and Shenzhen (south), as well as in the Macao Special Administrative Region. In China, Galeries Lafayette relies on an equal joint venture with local partner Hopson Group. The company was a tenant of the department store in Beijing.
Internationally, the group owns department stores in Indonesia (Jakarta), India (Mumbai and New Delhi), the Middle East (Dubai and Doha) and Luxembourg.
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