Louis Vuitton to Close Its Only Store in Guizhou

Louis Vuitton is set to close its only store in Guizhou.

The brand’s store at Lavant Center in Guiyang will cease operations on Aug. 31, bringing its four-year presence in the province to an end.

Guiyang, the capital of Guizhou Province and an important regional hub in southwestern China, is often referred to as “Little Hong Kong.” In 2022, Lavant Center opened as Guiyang’s first luxury shopping center, with Louis Vuitton, Balenciaga, Gucci, Cartier and Bvlgari among its marquee tenants. All five have since left.

Guiyang is not an isolated case.

Luxury brands have been pulling back from China’s second-tier cities for more than a year. This year alone, Prada closed its store at Inzone on Luoyuan Street in Jinan, Cartier pulled out of Changchun Charter Times Square, and Louis Vuitton closed its store at Kunming Gingko Department Store.

Luxury brands once looked beyond China’s major cities for growth, expanding their store networks aggressively across the country. But as growth has slowed and business has come under pressure, maintaining a broad presence across second-tier cities no longer makes the same economic sense. With consumers able to shop online or travel to other cities to make purchases, the case for maintaining a physical store in every province has weakened.

More important now is maintaining distinctiveness and relevance through more signature, high-impact retail spaces. The Louis, Hermès’ store at Taikoo Li Sanlitun in Beijing and Casa Loewe Shanghai are examples.

According to a recent Bloomberg report, data from market research firms showed that sales among the 25 largest luxury brands in China fell by more than 10 percent in July, a steeper decline than in June. People familiar with the data said Louis Vuitton, Dior, Gucci, Bottega Veneta and Balenciaga all posted double-digit declines.

Apart from weakening consumer confidence, luxury brands are also challenged by the rise of homegrown premium brands. And perhaps they should be worried about their performance in China’s biggest cities, too, not just in second-tier markets. After all, the brand now drawing long lines at the country’s top malls is Laopu Gold.