Knowing China through Taiwan

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H&M outlet bumps out Nike flagship store in Beijing

  • Staff Reporter
  • 2013-04-24
  • 10:30 (GMT+8)
An H&M store in Manchester, UK. (Photo/CFP)

An H&M store in Manchester, UK. (Photo/CFP)

Sportswear giant Nike is going to close down its flagship store in the luxury shopping mall APM in Beijing, with its place being taken by fashion retailer H&M, according to the Beijing Business Today.

The Nike store, which opened in 2007, measures 1,100 square meters and is spread across three floors. It was the first outlet in Asia to be owned by Nike, said the paper.

The report quoted sources as saying that while Nike had intended to renew its contract with APM on expiry, the mall preferred to lease the space to H&M, a brand which is more popular with local shoppers.

The sources said malls choose brands according to their profitability and the profit margins of sportswear companies are not high enough.

Like Spanish fast-fashion brand Zara, H&M holds a strong appeal for consumers in China's leading cities in spite of the fact that it entered the Chinese market relatively late, the newspaper cited a market analyst as saying.

These two companies are eating into the market share of sportswear companies, because sportswear cannot rival the market for casual clothing in the country, the analyst said.

For the same reason, the analyst said, the owner of the Village shopping area in Beijing's Sanlitun area is trying to persuade Adidas to give up some of its retail space.

Other sources said Nike is already a recognized brand in China and does not need to popularize its brand further by maintaining a flagship store in downtown Beijing, where rent rises at the average rate of 15% each year.

Nike has more than 100 outlets in Beijing, and the closure of one will not affect its overall sales, argued these sources.

Who's Who

  • Hung Hsiu-chu (洪秀柱)

    Hung Hsiu-chu (洪秀柱)

    Hung Hsiu-chu is a legislator for Taiwan's ruling Kuomintang and the deputy speaker of the Legislative Yuan. Nicknamed the "Little Chili Pepper" for ...