Gucci Shutters Two Shanghai Stores as China’s Luxury Market Slows

Kering's biggest luxury house is struggling.

French luxury brand Gucci is shuttering two of its Shanghai stores in response to a downturn in China's luxury market, the company confirmed to China Retail Watch.

The closures affect the Reel Mall store near Jing’an Temple and the New World Daimaru store near Nanjing East Road, both situated in prime shopping districts. The news first broke by a retail analyst Hanson on RedNote.

Gucci, owned by Kering, will maintain seven stores in Shanghai following the closures. The moves come as the brand struggles with declining sales in a key market. Kering reported that Gucci’s annual net revenue fell 23% to €7.7 billion ($8.3 billion) in 2024. Compared to its peak, when Gucci reached a sales momentum of 10.49 billion euros in 2022, the luxury giant has seen its revenue decline by nearly 2 billion euros.

The Asia-Pacific market, excluding Japan, is a critical region for Gucci, accounting for over 35% of its total revenue, with China playing a central role. However, shifting consumer behavior—where Chinese shoppers increasingly prefer to purchase luxury goods abroad—and a broader economic slowdown have weighed on sales.

Kering's challenges are not isolated to Gucci; the luxury conglomerate has faced broader difficulties, with profits plunging by 50% due to struggles across other brands, including Saint Laurent, Balenciaga, and Alexander McQueen. Other global luxury brands have also reported softer demand in the region, as high-net-worth consumers adopt a more cautious spending approach amid economic uncertainty.