Second thoughts time for Louis Vuitton in China. The French brands, reports the Financial Times, has announced the closure of three of its stores in the country, including its firstoutlets in Guangzhou, and prepare to close others. Louis Vuitton's move confirms therepositioning of the luxury world, grappling with the need for a reorganization ofdistribution strategies.
The Dragon market was invested in the last three years by a series of profound shock.Institutional in nature, having regard to the Government policy aimed at promoting greatermoderation and to fight corruption-of-luxury (made, i.e., through precious gifts). Moreover,the economic slowdown and the sudden maneuver last summer changes undermined theconfidence and the purchasing power of the population. If until now the decrease inpurchases of luxury in China was balanced by purchases of Chinese tourists in Japan and Europe, the crisis now seems comprehensive and begins to worry about the brands around the world.
Multinationals, says Financial Times, according to u.s. surveys, were diverted by overly optimistic projections about the growth of China and invested in the wrong city. "For LouisVuitton, specifically, it was an over-exposure of the brand – the Financial Times said TorstenStocker, a partner in A.t. Kearney consulting firm – which is not as popular as it is todayidentified as too pricey for the actual value of the product". Why shops closing decided bybrand is just the anticipation of what would have been a natural inevitable process: "20% ofLouis Vuitton stores in China would be gone by mid-2016," said Emmanuel Hemmerle,managing partner of the consulting firm in Shanghai.
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