H&M's Flagship Store in Beijing's Sanlitun Set to Close

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H&M's prominent flagship store, situated in the vibrant heart of Sanlitun, is slated to close its doors on Jun 11. This closure signifies H&M's exit from one of Beijing's most bustling shopping districts. However, this trend is not coincidental, as fast fashion brands such as H&M and ZARA have been steadily downsizing their retail presence and withdrawing from busy commercial areas in recent years. Once the darlings of the market, fast fashion outlets now seem to be losing their appeal and grappling to find a sustainable path forward in China.

A brief stop at H&M's flagship store in Sanlitun reveals multiple notices stating its imminent closure. According to staff, the store will cease operations on Jun 11 as a result of the lease expiring, however, they have assured customers that any returns or exchanges can be conveniently handled at other H&M locations in the future.

For H&M, the opening of its Sanlitun flagship store was of great significance. It opened in 2014 and was the 200th store it opened after it officially entered the Chinese market, and it was also one of the largest stores opened by the brand in China at that time. In 2016, H&M also redecorated the store. The upgraded store expanded the area from the original 1200 square meters to 2200 square meters and became the only H&M store in China with a luminous exterior wall design at that time.

Although H&M boasts an impressive exterior, it appears that only occasional customers are visiting the fitting rooms during a recent observation. An industry insider revealed that fast fashion businesses typically sign 10-year leases when launching stores, but, as contracts reach their end, these brands struggle to afford increased rents in the constantly evolving consumer market. For instance, as the appeal of fast fashion diminishes in areas like Sanlitun's Taikooli, prime locations are increasingly being occupied by fashionable boutiques that resonate more with the younger generation.

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H&M's flagship store in Sanlitun is far from being the first to close its doors, however. In recent years, H&M has been actively restructuring its store presence. Back in 2019, two longstanding H&M stores on Qianmen Street and Wangfujing Street were shuttered simultaneously. At that point, there were over 20 H&M locations in Beijing. The current count stands at 15, but with the impending closure of the Sanlitun store, the number will drop to just 14 outlets in the city.

The data reveals a significant decline in H&M's store presence in China, with the number of outlets falling from 479 in 2020 to 360 in 2022. This represents a decrease of over 100 stores within a span of approximately two years. Notably, H&M shuttered its inaugural Chinese store in June 2022.

An industry insider disclosed that consumer preferences are evolving in the Chinese market, as an increasing number of shoppers seek personalization, quality, and sustainability over the conventional fast fashion model. Young consumers with significant buying power are gravitating towards high-end, bespoke products from brands like ZUCZUG and Sandro which offer the unique designs they desire, as opposed to mass-produced fashion items.

Meanwhile, as the internet continues to rapidly evolve, fast fashion brands are striving to establish a strong presence in e-commerce channels. H&M, for example, has attempted to direct customers to its online shopping platform by displaying its website address at its Sanlitun store. Nevertheless, traditional brick-and-mortar fast fashion brands face significant challenges in making a breakthrough on e-commerce platforms.

This struggle is highlighted by Tmall's 2022 "618 Clothing Brands List," which revealed that China's clothing consumption trends are shifting towards diversity and personalization. Young consumers are increasingly seeking ways to express their individuality through their clothing choices, driving the emergence of numerous innovative fashion styles.

Despite facing hurdles, H&M remains committed to actively seeking suitable locations in Beijing and other Chinese cities to establish new flagship stores. The company acknowledges that shifting consumer preferences and the surge in online shopping have contributed to the diminished appeal of its brick-and-mortar stores. H&M emphasizes that China has always been a crucial market for them, and as the digital transformation of retail progresses alongside evolving customer shopping habits, they will persist in refining their store operation strategy to provide an enhanced shopping experience for Chinese consumers.

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Images: Unsplash

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