<div id="readability-page-1">US fashion brand Guess has told customers it will close all its stores in mainland China by the end of March, pending a new business model at a time when a growing number of international fashion retailers retreat from the market amid what analysts believe are issues including weak localisation and slow decision-making. Other foreign brands that have withdrawn entirely from mainland China in recent years include US label Old Navy, UK brand Topshop, and several labels owned by Spanish fashion group Inditex – Bershka, Pull&amp;Bear, Stradivarius and loungewear brand Oysho. In late February, Guess informed customers via text messages that it would close all its online and offline stores. As of Monday, all products from online flagship stores on e-commerce platform Tmall were removed from shelves. In a notice on its official Tmall flagship stores, Guess said it would close its official online store and it had already removed all products from sale. The brand planned to reposition itself in the Chinese market under a new business model, according to the statement. Guess did not immediately reply to an email inquiry from the South China Morning Post. The decision also comes after US-based Authentic Brands Group (ABG) acquired a majority stake in Guess in January. The deal valued the clothing brand at US$1.4 billion, including debt. Guess entered the mainland market in 2007 with its first store in downtown Shanghai. Riding the popularity of American denim and body-conscious styles, the brand once resonated strongly with younger Chinese consumers and operated about 250 stores at its peak in 2019.  Meanwhile, Inditex’s flagship brand Zara has been steadily reducing its physical presence on the mainland. “At its root, the difficulty comes from a combination of outdated business models and profound shifts in the macro environment,” said Wang Tianshi, an analyst at Shanghai-based LeadLeo Research Institute. “Some foreign brands lack a China-focused strategy and suffer from slow decision-making. This gap has left them in a passive position of slow response and insufficient localisation when facing rapidly shifting consumer trends in mainland China.” Sandy Lim, a China consumer analyst at S&amp;P Global Ratings, said ABG, the new majority owner of Guess, operates primarily as a brand intellectual property manager and licenser rather than as a direct retailer. “As such, the Guess brand is likely to be managed in a similar way, and the company may look to re-enter China under ABG’s operating model,” Lim said. Guess’ slowdown in China reflects the broader challenges facing international fast-fashion brands. Analysts said the traditional mall-based retail model had been undermined by China’s rapid shift towards e-commerce, live streaming and social commerce, alongside intensifying competition from domestic brands. “Foreign brands exit China for a variety of reasons,” Lim said. “These may include difficulties capturing consumer shopping behaviour through effective channel management, a lack of understanding of local tastes, and slow or inadequate adaptation to rapidly changing consumer preferences.” At the same time, some international retailers are experimenting with new strategies while closing underperforming outlets. Spanish fast-fashion retailer Zara shut more than 10 stores in mainland China last year and has continued to close additional outlets this year, mostly outside prime commercial districts. Inditex said Zara would focus on opening larger flagship locations and introducing digital innovations such as self-checkout systems to enhance the shopping experience. In December, the brand reopened its upgraded store on Shanghai’s Nanjing East Road, covering more than 2,400 square metres. American retailer Forever 21 exited the Chinese market in 2019 and filed for bankruptcy. In 2020, a consortium led by ABG acquired the brand and later relaunched its China business on domestic e-commerce platforms Pinduoduo and Vipshop. “To gain a firm foothold in today’s market, these companies must carry out surgical-level localisation reforms, such as building a weekly rapid-response mechanism and turning stores into online-offline integrated experience centres,” Wang said. “Product selection strategies must be deeply tailored to the preferences of mainland China’s county-level markets and specific niche groups, while reducing globally unified procurement,” he added. </div>

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<p>US fashion brand Guess will close all its stores in mainland China by the end of March as it seeks a new business model. This decision comes amid a trend of international retailers exiting the market due to challenges like weak localization and slow decision-making. Guess has removed all products from its online flagship store on Tmall and plans to reposition itself in China. Analysts suggest that foreign brands struggle with adapting to local consumer preferences and the rapid shift towards e-commerce. The brand's new majority owner, Authentic Brands Group, may influence its future strategy in China.</p>

Guess says it will shut all mainland China stores amid retail rethink