Xinhua recently reported that Louis Vuitton (LV) just closed down one of its key stores in Guangzhou, which is the capital city of Guangdong Province – one of the most economically developed provinces in China and the closest province to Hong Kong. It is very telling since the store is still profitable and it is not the only LV store to close. Louis Vuitton is a widely recognized luxury brand in China. The move is symbolic since it’s the latest event that represents a continuous “flood” of store closures across many luxury brands since last year. Other examples include Gucci and Burberry. According to a research report by Bain & Company, the Chinese luxury market started to suffer a negative growth in 2014, which saw the largest number of store closures. Experts suggested that the main causes of the decline in the luxury sector were the anti-corruption movement, low domestic consumer spending, and customers shopping directly outside of China.
Source: Xinhua, November 13, 2015