By CHEN Qirui
H&M continues to transform its China expansion strategy into what appears to be a contraction strategy. The Swedish fast fashion brand will close its celebrated flagship store in Beijing’s Sanlitun on June 11. The vast store occupies over 1,200 square meters across three floors and is one of H&M’s largest.
The abandonment of such a prime site is part of H&M’s attempts to catch up with fast-changing consumer whims and preferences. The brand claims to have plans for new flagship stores in Beijing and other cities, but nothing is in the public pipeline.
H&M’s is not the first of its kind among fast fashion brands in China. Zara and GAP have also closed stores in cities like Beijing, Shanghai and Guangzhou. GAP has sold its entire Chinese business lock, stock and barrel for US$ 40 million (282.92 million yuan). Its subsidiary, Old Navy, has left China. In contrast, Uniqlo – with an almost identical product line – has plans for 100 new stores in China year.
The decision to close stores is partly influenced by rising rents. Fashion brands once enjoyed long leases at low rents, but no more. Now everything is “fast” including rent hikes. Some brands have closed existing stores while saying that are negotiating better terms in new locations.
H&M is enthusiastically insisting that China remains a crucial market for the company.
