SKP keeps on growing
What: SKP, despite challenging market conditions, continues to expand its footprint and open new stores, including its latest location in Wuhan.
Why it is important: SKP has established itself as one of the world’s premier luxury retail destinations, maintaining its growth trajectory even amidst broader economic challenges.
SKP, a luxury department store chain under the Beijing Hualian Group, celebrated the grand opening of its new outlet in Wuhan, Hubei province, on July 26. The store generated CNY 100 million (USD 13.8 million) in sales on its launch day and has attracted over 100,000 visitors since its trial opening on July 13. This Wuhan location marks the fourth store for SKP, joining its outlets in Beijing, Xi'an, and Chengdu.
The new Wuhan store also features SKP-S, a sub-brand targeting Generation Z consumers with a curated selection of designer brands focused on youth culture and luxury retail. Despite the rise of e-commerce and livestream shopping, high-end department stores like SKP continue to perform strongly. In 2022, SKP’s Beijing store reported a revenue of CNY 24 billion, which rose to CNY 26.5 billion in 2023. The Xi'an location, however, saw a revenue decrease from CNY 9.5 billion in 2022 to CNY 8 billion in 2023, while the Chengdu store reported CNY 5.5 billion in revenue last year.
The expansion of high-end retail continues across China, with new outlets such as Shenzhen Coastal City's second location and the first Mixc store in Guiyang by China Resources. This sustained growth underscores the strong demand within China's luxury market, which is projected to increase by 3 percent to USD 240 billion this year, according to the Hurun Chinese Luxury Consumer Survey.
The luxury retail sector's growth in China contrasts with the global luxury market, which has seen slower growth this year. However, regions like Europe and Japan have benefited from increased luxury tourism, particularly from Chinese travellers, bolstered by favourable currency conditions.
SKP’s strategy of combining traditional retail with targeted marketing campaigns and a focus on younger consumers seems to be paying off, as it continues to strengthen its position as a leading luxury retail destination in China.
