Bond Street is popular with fans of luxury brands
(Picture: Getty Images)There will be a celebratory mood this Sunday as tens of thousands of visitors head to the West End and enjoy the full scale return of the capital’s Lunar New Year celebrations. The hugely popular festival was scaled back following the pandemic, but now that lockdown rules are gone, a party atmosphere is expected in Trafalgar Square and Chinatown, with live music, food stalls and a vibrant parade.
Central London retail and restaurant bosses will be among those thrilled about the event to mark the start of the Year of the Rabbit, with footfall getting an instant lift from domestic and some overseas shoppers.
But longer term, brands are hoping that 2023 will see the return of more high-spending Chinese tourists to zone one, and the UK getting a share of the impact of what analysts call a “big bang” Chinese reopening.
Luca Solca, a senior research analyst at Bernstein said in a note this month that “the Chinese authorities are reopening faster and in a “big bang” fashion- both inbound and outbound travel at the same time”. He added that this is “great news for luxury goods”, with Chinese consumers going back to the stores in China, and returning to Europe.
A number of premium retailers are feeling upbeat about London trading in 2023, after a good performance last year, and in many cases substantially rebased business rates kicking in this April. They could also be helped by the return of more shoppers from the world’s second largest economy.
Retail property agents are seeing good demand for stores in prime locations. Colliers’ Paul Souber says: “With Chinese shoppers back we expect to see further high end brands entering the capital’s luxury districts.” He is aware of at least 50 international and domestic companies wanting to open debut or more shops in zone one over the next 12 months. Peter Mace at Cushman & Wakefield says stores are reporting good trading figures: “This trend should continue in 2023 with a number of very good requirements for both Bond Street and Sloane Street.”
Looking at trade during the Chinese New Year celebrations, and brands such as Burberry and Radley London are among those selling special collections, with the latter stocking bags and purses featuring images of rabbits on them. Those products could prove popular in London as well as across the globe this month.
Radley’s chief product officer Jackie Hay says customers are returning to the firm’s UK and international shops in greater numbers recently. She adds: “Each year we sell a special collection for this calendar event and this year we hope that our lunar collection is the most popular to date.”
But firms could be waiting a while longer for footfall from Chinese tourists to surge here. While travel overseas for Chinese citizens will become easier, ForwardKeys, which analyses flight booking data, is not expecting an instant resurgence of outbound tourism. It points out that ticket prices remain high and current scheduled international flight capacity is only at 10% of 2019’s level.
Helen Brocklebank, chief executive of luxury goods trade body Walpole says: “The timing of China’s relaxation of zero Covid rules ahead of Lunar New Year is undoubtedly cause for optimism for British luxury brands. This is a key opportunity to reconnect with Chinese customers either instore or -given the lack of direct flights from mainland China to London– online, in preparation for the second half of the year which we anticipate will have the most significant uplift in Chinese visitors.”
But Brocklebank cautions that London is at a disadvantage to rival European cities because of the loss of tax-free shopping here, which could send some would-be buyers to Paris and Milan instead.
The capital’s luxury sector may not get quite the big impact yet from China’s reopening it would have liked, but there are reasons to be upbeat.
