he Burberry Shanghai flagship store has been shuttered as the British luxury-goods retailer looks to reduce costs.
It is the fourth Burberry location within Mainland China to be shuttered within the last eight months as part of a global restructuring effort, representing a conspicuous and somewhat puzzling drawing back from a key luxury market.
The closure of the 1000sqm flagship means that half of Shanghai’s Burberry outlets have now vanished, after the brand’s K11 mall store disappeared last August and its Westgate Mall and Hongqiao airport halted operations a month ago.
The closures were prompted by poor demand for Burberry products in Asian markets, and are part of the firm’s global strategy to cut back on underperforming retail locations.
Representatives of the brand have pushed back on speculation that the closures signal an all-out withdrawal from China.
“China is a hugely important market for Burberry and we are fully committed to growing our business there. We are making some of our biggest investments in Shanghai where we recently refreshed our flagship store at Kerry Centre and we will open two new stores at IFC Mall and IAPM Mall in the coming months. This strengthens our presence in Shanghai, a key luxury shopping destination, and we are excited to welcome our customers to these new locations.” said a company spokesperson.
“Burberry is not so much closing down as relocating to new stores,” said JLL’s head of retail for China Ellen Wei, noting that Burberry plans to open two more strategically located stores in Shanghai shortly.
Burberry bought out its Chinese franchises in 2010 for £70 million (US$91.4 million at current rates) in response to the country’s burgeoning taste for luxury products.
The Burberry Shanghai flagship was located in the L’Avenue shopping centre in Gubei.