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Stitching up a once popular fashion street
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A famous Hangzhou street known for its clothing stores has fallen on tough times in the past two years.
A combination of high rents, fierce competition from online shops and glitzy new shopping malls have forced many boutiques to close down on Wulin Street, once a vibrant hive of activity.
Twelve years ago, the Hangzhou government successfully forged this narrow road into a long strip of stylish apparel stores. The 1.6-kilometer-long street had more than 400 garment shops at its peak and attracted an average of 30,000 customers every day.
It was even dubbed the “No. 1 women’s apparel street in China” and was considered a symbol of the city’s booming apparel retailing industry. Many popular women apparel brands would open a store on the street to showcase their latest designs.
However, the golden old days were gone. When Shanghai Daily reporter paid a visit to the street last week, at least 30 stores were shuttered while 10 others had posted leasing information.
At the intersection of Wulin Street and Changhua Road, four of 11 stores were closed. Another four were empty at the crossroad of Anji Road and Wulin Street. Along the junction of Shihuqiao Road and Wulin Street, six stores were vacant. Some of the closed stores still had window signs advertising new arrivals for 2014.
“In the past, an endless stream of customers flocked to the street. Now they are gone,” said Chen Li, who has worked as a shop assistant in small-scale apparel store HYH for four years. “Several years ago our monthly turnover could reach 300,000 yuan (US$48,890) to 400,000 yuan, but now it’s only 100,000 yuan, barely enough to make ends meet.”
The incredible rise of online shopping is one factor for the street’s sudden slump. Taobao.com gives those with a computer, laptop, smartphone or tablet and an Internet connection access to millions of stores without having to leave their home.
About 65 percent of 6 million Taobao shops specialize in apparel, which diverts a large number of customers from brick-and-mortar shops.
“Some operators choose to shut down the brick-and-mortar shop and open an online shop on Taobao,” said Ren Qianqian, who owns both a Taobao shop and an apparel shop on Wulin Street.
“It is hard to say the Taobao business is better than the brick-and-mortar shop because the online shopping market is nearly saturated,” Ren told Shanghai Daily. “But regardless of whether it’s cyberspace or in real life, the apparel retailing industry has suffered in the last two years.”
The sky-high rent on Wulin Street has also scared away shop owners.
A shop assistant at an apparel store said the small store’s annual rent is between 300,000 yuan and 400,000 yuan.
“Our shop has operated for more than 10 years. However, my boss began to feel the slump from 2012, but she holds on because returning customers favor her original designs,” the shop assistant said. “To reduce costs, her boss laid off some employees.”
Centaline Real Estate Agency said the street’s average daily rent per square meter had soared from 10.4 yuan in 2004 to 28 yuan in 2012.
In the past two years, rents have remained nearly flat due to the overall downturn of Wulin Street. However, rents still remain higher than other commercial areas in Hangzhou. One landlord said rents have bottomed out.
“I rented my 146-sqaure-meter store for 1 million yuan annually a couple of years ago. Now the annual rent is only 400,000 yuan,” said the landlord surnamed Zheng. Even at that price, Zheng’s store sits empty.
“Now my only wish is to lease it as soon as possible, but I won’t drop the rent any further,” Zheng added.
Ren said she moved her shop from Shihuqiao Road to Wulin Street because the rent was lowered.
“The monthly rent is 10,000 yuan, which is affordable for me at present,” said Ren. “I am not scared off by the downturn. I believe things will get better if it has already hit the bottom.”
Wulin Street is also facing more traditional competition as upscale shopping malls have opened nearby, including Intime Shopping Mall and Hangzhou Tower.
“These big shopping malls have better infrastructure and many restaurants. Customers can enjoy food and have a rest after they walk around,” said shop assistant Chen. “People also prefer air-conditioned malls over street shops during the summer. They also have more parking spaces.”
Despite the challenges, there are signs things will improve.
According to a Qianjiang Evening News report, the Wulin Street Management Commission plans to upgrade Wulin Street although few details have been released.
In early August, Hangzhou-based Alibaba Group, which operates Taobao.com and holds more than 90 percent of the online market for consumer-to-consumer transactions, announced a strategic cooperation plan with Xiacheng District government.
The two sides plan to turn Wulin Street into an online-to-offline — check goods on the Internet and then buy them in stores — area featuring restaurants, hotels, entertainment venues, public services and shopping. The plan is predicted to come into effect in June 2015. The first step has already been realized — the street now has free Wi-Fi.
“The plan seems feasible,” Ren said. “But it still remains to be seen whether it can really save the once glorious street.”
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