Every era has its own opportunities—but in this one, the key to success may no longer lie in “aggressive expansion.” Over the past quarter, multiple high-end fashion brands have shuttered some of their most iconic stores.
A closer look reveals that major fashion retailers have been focusing their restructuring efforts on three key strategies: phasing out underperforming stores, concentrating on high-value locations, and catering to the “dumbbell-shaped” demand of an increasingly stratified consumer base. Interestingly, from the consumer’s perspective, many stores that once served as flagship representations of a brand’s image have, over the past decade, gradually become—in some ways—”inefficient.”
For instance, in the first half of this year, Gucci closed two stores in Shanghai: one at Réel Mall in the bustling Jing’an Temple area (where it was one of the first luxury brands to open when the mall launched in 2012) and another at New World Daimaru Department Store—a prime, sprawling street-front location near Nanjing East Road that was once a landmark destination.
In Beijing, three luxury menswear flagships—Zegna, Giorgio Armani, and Emporio Armani—closed their standalone stores at China World Shopping Mall after 17 years of operation. These buildings, opened in 2008, were once iconic symbols of luxury brands’ expansion in China.
Meanwhile, in May, Aesop, L’Oréal’s premium fragrance and skincare brand, closed its debut store on Dongping Road in Shanghai. While some industry insiders attributed the closure to an expired lease, the store’s influence on retail trends cannot be overlooked. Since its opening, Aesop’s presence accelerated Shanghai’s shift from traditional mall-centric retail to “small-street” commercial hubs, inspiring brands like Erdos and Maia Active to follow suit.
Other brands, such as Filippa K, By Far, and &Other Stories, have either quietly exited the Chinese market or drastically scaled back to just a handful of stores.
At first glance, against the backdrop of sluggish consumer sentiment, these closures might seem like a simple case of survival-of-the-fittest in fashion retail. But zooming out, they reflect a broader restructuring driven by channel efficiency.
Times are changing rapidly. Beyond shifting trends, the once-reliable “traffic formula” for store expansion no longer applies.
China’s market has no shortage of consumers. In recent years, demand-side phenomena like “chinatravel” and the rise of county-level tourism have proven to be lasting trends. The foundation of retail consumption remains strong, but consumer needs are becoming more segmented, and channel monopolies are eroding.
In other words, as retail enters the deep-water phase of its 3.0 transformation, brands are now targeting high-value zones—no longer defined simply by city tiers, but scattered across niche communities and subcultural hubs.
