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Parkson closure indicative of luxury segment's struggles

Released at: 15:11, 09/01/2015

Parkson closure indicative of luxury segment's struggles

Too few customers at heart of decision to close Parkson Landmark Keangnam.

by Minh Tuyet

There were many factors behind the recent closure of Parkson Landmark Keangnam in Hanoi, according to Mr. Vu Vinh Phu, Chairman of the Hanoi Supermarket Association.

“Luxury items don’t attract the majority of customers,” he said. In many cases they are bought as gifts, he added, not for personal consumption, and this makes luxury shopping habits hard to predict. Many shoppers are also concerned about whether luxury items are originals or counterfeits, which is a problem that plagues the sector.

Many shop owners were actually happy to receive the announcement that the center was closing. One shop owner said she was already keen to move elsewhere because sales were so low. “I hadn’t moved because my lease still had several months to run,” she said.

A representative from Parkson said that the company had been committed to develop in Vietnam’s retail market and considered it to be a market of potential for providing luxurious brands to consumers. The representative did not say when Parkson Landmark would re-open, but that “Parkson Landmark was closed to resolve issues between us and the building owners.”

Parkson Landmark isn’t the first shopping center in Hanoi to experience major difficulties. Trang Tien Plaza closed down in August 2014 and will re-open this month. In 2013 the Grand Plaza shopping center closed its doors due to a lack of customers, while Mipec Mall was restructured twice before allowing Lotte Mart to lease all of its space.

Ms. Le Lan Phuong, Deputy Director of Trang Tien Plaza, said that she wasn’t concerned that a number of shopping centers were experiencing tough times. She believed that Trang Tien’s location and history were major advantages that will help the center overcome any difficulties upon re-opening.

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