Many visitors to the Bund in Shanghai will have been surprised to see the range of stores and could have believed they were shopping in London or Paris. But it appears that things are not what they once were. There has been reports that there are a number of top of the range brands’ leaving the area and as yet it does not seem that there is plan about how to replace them.
This is in sharp contrast to the situation 10 years ago when Shanghai became a target for these same companies who saw China as an emerging market. It was not middle of the road companies who went in, but Armani quickly followed by Cartier, Patek Philippe and Bouchon. All made serious investments and are responsible for the way that the Bund is viewed throughout China and with the many Western visitors.
What has since been revealed is that there was more of a showroom appeal than a store. Products were viewed and Chinese residents knew what was available, but the purchases were not what was expected.
Figures have not fallen when it comes to the amount of visitors going through the doors, but visits it is being said does not equate to sales.
The reason for this it seems is that the Bund is not the ideal place for local people to shop. Traffic is bad and they often shop elsewhere. Few visitors will go to China to buy French and Italian designer products and the stores are suffering because of this.
A sales assistant who has been employed by a number of the main stores has been prepared to speak about the problem. The main information concerned a shop that sold Italian designer watches and the reality was that there had been just 20 watches sold in a month. With that sort of record it is clear why there are problems and CEO’s are becoming edgy.
Some companies have already moved out of the Bund and have chosen to trade from areas with lower rents. The organisation of the Bund is also becoming a problem as there are many different owners when it comes to the real estate. As their high profile clients move out they are keen to let the building and soon there are other top range companies not happy when it comes to their new neighbours.
There has been a fight back by the owners of the businesses on the Bund and it has been announced that while there may be some empty premises, there are also a lot that are still full and trading well. They continues that brands were also present on the Huaihai Road and Zara and H&M were on the way.