SKP expands domestic luxury footprint

SKP, the country's leading luxury department store operator, is expanding with a new flagship in Guangzhou, Guangdong province, signaling growing momentum in the country's high-end retail sector.

The store, the first SKP in South China, is expected to become a landmark for luxury shopping and will join the ranks of Taikoo Hui and MixC in the city's upscale retail landscape.

Yuexiu Group and Beijing Hualian Group Investment Holding Co Ltd formally signed an agreement to develop the Guangzhou SKP on March 2.

The shopping complex will be located at the Pearl River new town area, a commercial hub that positions Guangzhou as an emerging international consumption center.

Guangzhou, a core engine of the Guangdong-Hong Kong-Macao Greater Bay Area, boasts a GDP surpassing 3 trillion yuan ($435.53 billion) and a population exceeding 24 million. The city's commercial evolution aligns with broader trends in the country's luxury sector, where brands are shifting from broad coverage to deeper market penetration, focusing on store-level sales and scale.

Yuexiu will handle project development, construction and long-term ownership, while SKP will oversee operations and management.

Chen Qiang, chairman of Yuexiu Group, projects that the Guangzhou SKP will bolster the city's appeal for luxury retail. Construction is slated to begin by the end of March, with completion expected within three to four years.

The project aims to create a mixed-use urban complex integrating parks, retail, hotels, offices and residences, while establishing a new world-class consumption landmark and high-end office space.

SKP is renowned for hosting the most comprehensive array of top luxury brands, including Hermes and Chanel, and consistently leads national sales rankings for single department stores. SKP's expansion continues with Wuhan SKP in Central China's Hubei province slated to open in October 2026.

The department store's track record underscores its market influence. SKP's Chengdu store in Sichuan province and Xi'an store in Shaanxi province continue to dominate local luxury consumption markets.

In addition, leading commercial real estate operator Swire Properties Ltd delivered a strong performance last year, signaling positive market momentum.

On the Chinese mainland, the company's retail portfolio delivered an improved performance. The support of government policies — including visa-free entry, the value-added tax refund scheme and the further roll-out of economic stimulus measures — helped boost consumer confidence, said the company.

Attributable retail sales grew by 7 percent, outperforming the market and remaining 65 percent above the 2019 levels.

The company said their highlights during 2025 included the opening of "The Louis" by Louis Vuitton at HKRI Taikoo Hui in Shanghai, generating a large amount of buzz and significantly boosting footfall in the mall.

In Beijing, the reopening and repositioning of Taikoo Li Sanlitun North unveiled a transformed retail landscape, featuring prestigious luxury flagship stores.

According to Bain & Company's 2025 Chinese Personal Luxury Goods Market report, after riding the recovery momentum in the second half of 2025, the personal luxury goods market is expected to show more positive signs in 2026. China will remain a cornerstone of global luxury market growth, said the report.

Bain estimates that in 2025, 65 percent of Chinese luxury consumption occurred within the market, while 35 percent took place elsewhere. Domestic tourism growth and ongoing shopping mall promotions further supported the consumption despite the continued recovery of outbound travel, said the report.