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The Danish jewelry retailer has substantially increased the number of Chinese stores set to close this year, now planning to shut down up to 100 locations—doubling its previous estimate of at least 50. This comes as the brand’s appeal in China continues to decline. So far this year, 22 stores have already closed.
The company entered the Chinese market over ten years ago and quickly gained popularity, especially among young consumers drawn to the ability to customize their bracelets with a variety of charms and designs. In 2017, more than half of its total revenue was generated from its signature “bracelet plus charm” products.
However, after several years of decreasing sales, the Chinese market’s contribution to its overall revenue has shrunk significantly—from 9 percent in 2019 down to just 1 percent last year.
When it first launched in China, few brands offered similar customization options, making its offerings stand out among young shoppers, according to a marketing executive at a leading Chinese gold jewelry company.
In recent years, the market has been flooded with inexpensive imitations, and many jewelry stores, including well-known names like Chow Sang Sang, Lukfook, and Lao Miao, have introduced their own customizable gold charm bracelets.
Another factor contributing to the decline is the value retention of jewelry pieces. A few years ago, a gold charm bracelet was similar in price to one made from copper, silver alloy, and zirconia. Now, gold bracelets tend to hold their value much better, making them more attractive to consumers.
The rising preference for gold jewelry among young buyers has also begun to diminish the market share of brands offering jewelry made from other metals.
Additionally, China’s jewelry retail sector is becoming more complicated, especially for luxury brands. Revenue from Swiss luxury conglomerate Richemont Group’s jewelry division in China dropped 23 percent in the fiscal year ending March 31, primarily due to poor sales of its Cartier and Van Cleef & Arpels lines.
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