Picking up a loaf of bread and a Gucci bag

LUXURY SALES SLOW

A luxury goods retailer said on Wednesday that sluggish sales are behind the decision to open a shop inside a supermarket, as it looks to reach more ordinary consumers.

Della Mela, a premium multibrand luxury fashion boutique, has acquired almost a quarter of the floor area at the luxury products sector in the Century Lianhua Supermarket in Hangzhou and sells high-end, custom-made suits and other products including brands like Fugato.

"Since it opened on Saturday the sales of suits, shirts and shoes have been good, while customers largely shied away from the really expensive leather products and those made of alligator skin," said Teresa Wang, marketing director of Della Mela.

She said sales at the new store are not as robust as expected, but the company will make adjustments and look into the option of opening more outlets near large grocery stores.

"We saw a major fall in sales last year, and the prospects are not optimistic for the next two years," she said. "Although we're not 100 percent sure about this new approach, we still want to try."

According to the 2013 China Consumer Market Development Report by the Chinese Academy of International Trade and Economic Cooperation, the growth of the luxury market on the Chinese mainland slowed to 7 percent last year from 30 percent in 2011, the lowest level since 2006, partly due to government policies to crack down on waste and lavish spending.

Purchases of luxury brands, particularly in the male luxury sector, will remain low this year, the report said.

Zhou Ting, director of the Fortune Character Research Center, said she believes the popularization of luxury brands after almost a decade of aggressive expansion has led some of the brands to "inevitably step down from their high, untouchable altar" and into people's daily lives.

"It has nothing to do with the sluggish luxury market, but a must-go-through phase," she said.

Gucci China said it has noticed the news online but is not sure whether the products sold there are authentic, and is having its legal affairs department look into it.

— Wang Zhenghua