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Can fading retail district reinvent itself?
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HANGZHOU’S downtown Wulin commercial district has fallen on tough times this year, with several fashion and jewelry stores closing and “for lease” signs popping up everywhere.
At one time, the district, located in the area around intersection of Tiyuchang and Yan’an roads, was considered a golden commercial belt, producing billions in revenue every year.
The three-floor flagship COCOON store selling the namesake women’s clothing brand shut its doors last month.
“This store was open for years,” said local resident Li Pengfan. “Though its dresses were pricey, I still bought one or two every year, but saw fewer customers and fewer dressed starting this year. Maybe it was due to nearby urban renewal construction.”
Hangzhou is undergoing massive urban development as the city tries to reshape its image and encourage more consumption. That has brought more retail competition, higher rents and the noise and dust of construction zones to older areas like Wulin.
COCOON is an example of the changes underway.
In the last seven years, the store spent large sums of money on rent and in marketing to promote its brand. Its location next to the up-market Ssaw Plaza Hotel and its line of stylish, vintage clothes made it popular with customers.
Less welcoming were the noise, dust and congestion created by nearby construction sites.
At the crossroads of Tiyuchang and Yan’an, a huge city shopping plaza is being built. It is being compared with Shanghai’s K11 mall, integrating art, novelty architecture and entertainment-related facilities.
Not far away, the Hangzhou Kerry Center is also under construction. It is expected to fill a commercial gap between Wulin and Hubin commercial districts.
Renovation work in nearby Baijingfang Lane parallel to Tiyuchang Road is also ongoing.
Those large construction sites, plus work on the new Metro Line 2, have caused traffic congestion, swirling dust and the loss of parking spaces. It’s not a mix designed to entice shoppers to the area.
Anyone walking westward along Tiyuchang Road will find shuttered places like COCOON, the OASIS store, a Chow Tai Fook jewelry outlet and a popular shoe shop. Taking their places are down-market budget stores and empty storefronts with leasing signs.
The west side of Yan’an Road opposite to the Wulin Intime shopping mall was once considered Hangzhou’s most prosperous retail strip, with rents reaching 100 yuan (US$16) per square meter a day.
The glory days are gone. When a Shanghai Daily reporter visited the street last week, at least 10 stores were shuttered in the district. The majority were flagship shops selling specialty brands of apparel and jewelry.
Shopping malls like Wulin Intime, Hangzhou Tower and Hangzhou Baihuo Mansion are suffering from falling numbers of customers and declining revenue. Skyrocketing rents are hard to meet. Some shop owners have simply packed up and left.
The flagship store of the ME & CITY apparel chain was paying 12.5 million yuan a year in rent, according to a report in Hangzhou Daily. The fashion store finally closed this year, and its shop space was taken over by a home appliance retailer.
“Though rents are nearly flat now due to the overall downturn of this commercial district, they are still much higher than elsewhere in Hangzhou,” said a shop assistant who declined to be identified. “Now, the high rents don’t reflect comparatively low demand. Some shops have decided to move to newer, more bustling shopping malls rather than trying to make ends meet here.”
Some commercial landlords have dropped rents in order to retain tenants or attract new ones.
When Jovan jewelry moved out of Yan’an Road, the facade of its outlet was plastered with leasing information that offered lower rents to new tenants.
Competition also plays a role in the changing face of the Wulin district. More new malls are being built, some with better advantages for retailers.
Customers are increasingly being drawn to other places, like the new Hubin commercial district, which benefits from its location on Metro Line 1 in attracting both locals and tourists from the West Lake Scenic Area.
The third stage of the Hubin Intime shopping mall, which hosts Asia’s largest Apple flagship store, has been opened, offering big name fashion brands and popular restaurants.
The area is fast becoming the new hot spot in Hangzhou shopping.
Other rising competitors are the newly opened Wanda Plaza and the up-market Mixc Mall.
“The attraction of the Wulin commercial district is dropping day by day, but that doesn’t mean it can’t enjoy a revival,” said Zhou Jianfang, a former employee of Hangzhou Tower in the Wulin district, who now works for e-commerce giant Taobao.
Zhou said annual sales in Hangzhou Tower, one of the city’s earlier luxury brand malls, steadily decreased during his two years there.
“The district may be revived by the construction of two new malls and the opening of Metro Line 2,” he said.
“But that might take a couple of years. After all, this is still part of the center of Hangzhou.”
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