Shanghai Bund loses luster for luxury brands  

外滩失宠奢侈品牌 上海传统核心商圈陷转型阵痛

(ECNS) -- Despite being known as the home to many global high-end boutiques, the Shanghai Bund's glamour has been fading as luxury brands are leaving one after another, the National Business Daily observed on Thursday.

The famous waterfront area of central Shanghai, where rows of majestic Western-style buildings stand, was considered a perfect place for outlets when global luxury brands began to target the Chinese market 10 years ago.

Armani Group opened its first store in the Bund No. 3 building in 2003, followed by French watchmaker and jeweler Cartier, Italian fashion house Ermenegildo Zegna, Swiss watchmaker Patek Philippe and French jewelry house Boucheron, which all opened flagship stores there.

The Bund since then has been known as one of the world landmarks for luxury products, analysts said, although these luxury brand outlets were used more like showrooms rather than stores.

Although the Bund remains the city's most-visited tourist attraction, the district has been failing to provide a favorable environment for high-end retailers in recent years.

The Bund does attract visitors, but few of them shop at the luxury stores. Piaget CEO Philippe Leopold-Metzger found during a visit that local people will not buy luxury goods on the Bund due to congested traffic, while tourists with limited spending power are certainly not their customers.

"Those luxury brands might be too optimistic about the potential profits from the Bund," said an industry insider named Sandy, who has worked in several luxury stores. Sandy revealed that the outlet of an Italian luxury watch brand on the Bund had suffered losses for a long time, with less than 20 watches sold in a month.

Meanwhile, luxury firms have gradually adopted more practical marketing strategies and chosen to retreat from the area with high rents. This comes amid increasing popularity among Chinese consumers and the ongoing anti-graft campaign.

Moreover, behind every building in the Bund is a separate state-owned enterprise that rents its property to independent developers. Since there is no unified management, some owners have rented to retailers whose brands are not considered high-end, making luxury brands reluctant to be their neighbors.

Hong Shuhui, president of Colliers International Real Estate Company's East China Branch, said that unlike the empty stores on the first floors, all the second floors of the Bund's buildings are rented out, and many firms are on the waiting list.

The report also noted that Huaihai Road, the city's traditional famous shopping street, is also undergoing a transformation, with more fast-fashion brands arriving, including H&M, Zara and Uniqlo.