Summary in One Sentence:
Recently, domestic high-end shopping malls have undergone a major transformation that hasn't been seen in over a decade: the era of luxury brands frantically opening stores to expand their presence has come to an end. Leading luxury brands such as Gucci, LV, and Prada are actively closing stores. The vacant spaces are being taken over by three new types of businesses—local brands selling traditional gold, high-end sports and outdoor brands like Asics, and niche designer brands. The rules of the high-end retail game have shifted from simply displaying luxury logos to focusing on attracting and serving a targeted, high-net-worth customer base to maximize efficiency.
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1. Luxury Brands Closing Stores: Not Because They Can't Sell, but Because Small Stores Are Unprofitable
When people hear that Gucci plans to close 250 stores by 2030 or that LV is closing even its airport stores, the first thought might be that luxury goods are no longer selling well. However, this is not the case. The logic behind luxury brands' aggressive expansion in the past was simple: consumers bought luxury goods infrequently, so having multiple stores nearby meant more sales. But this logic no longer applies. Today, luxury shoppers don't buy based on proximity. Instead, they avoid poorly decorated stores in non-core areas with limited inventory and no proper seating, as they feel the store's reputation has declined. Luxury brands are now focusing on more efficient operations, closing inefficient stores across the country and investing the savings in flagship stores in prime locations like Shanghai's Honglong and Beijing's Guomao. These stores are designed like art galleries, displaying limited-edition products to serve their high-value customers, generating more revenue than ten smaller stores combined. The main affected are the high-end malls that relied on luxury brands to attract customers; they suddenly find themselves with vacant spaces and need to find new tenants.
2. Traditional Gold Brands Become the New Stars: Selling Better Than Hermès, but with Risks
Unexpectedly, it's local gold brands that have taken over the best locations in top malls. For example, an established gold brand sold over 23 billion yuan in the Chinese market in 2025, surpassing Hermès in revenue and ranking second in the luxury market, only behind the LVMH group. These brands generate significant profits per store, with some even achieving annual sales of over 1 billion yuan—three times that of many luxury flagship stores. However, this success comes with challenges. Malls are now charging higher rents (around 20% of sales), and the competition for prime locations is fierce, with nearly a dozen gold brands in one mall like Shenzhen's Vanke City. The downside is that these brands rely on craftsmanship and scarcity, making it difficult to expand rapidly. Moreover, the rise in rents and competition from traditional gold brands using mass production are putting pressure on these new entrants.
3. High-End Sports and Outdoor Brands Are the Stable Winners
High-end shopping malls are now favoring sports and outdoor brands like Asics, Lululemon, and Salomon. For instance, Amalfi Sports, which owns these brands, saw a 43% increase in revenue in the Chinese market in 2025, outpacing most luxury brands. High-net-worth consumers have shifted their spending habits: they no longer just buy luxury brands for the logo; they buy high-quality gear for outdoor activities. These brands attract customers regularly, ensuring steady traffic. However, this also leads to homogenization, as many malls end up with similar brands, which can become boring for customers.
4. Niche Designer Brands: Promise Much, but Most Fail to Survive
Many niche designer brands that were once only known on platforms like小红shu are now opening stores nationwide. For example, Korean brand Ader Error and French brand Polène have seen immediate success, with some selling over 2 million yuan in their first month. These brands target young, high-net-worth consumers who want unique fashion. However, most designers lack business acumen and struggle to manage their stores effectively, often running out of stock and failing within a few months. The contradiction between designers' artistic aspirations and malls' need for quick profit makes it difficult for them to succeed.
5. The Era of Easy Profits in High-End Malls is Over
In the past, high-end malls could simply invite famous luxury brands and collect rent. But now, consumers are more discerning. They buy luxury goods based on value, functionality, and uniqueness. Malls must redefine their roles to attract and retain customers. The next few years will see a fierce competition for a clear brand identity, as malls need to determine whether to focus on gold and jewelry, sports and lifestyle, or niche aesthetics. Only those that successfully target their specific customer base will survive this transformation.