And Finally

Doll loses house

Barbie’s “home” in Shanghai closes its doors

Doll loses house

Looking but not buying

When the Barbie flagship store opened in Shanghai in March 2009, owner Mattel said it would be the “ultimate destination for both young girls who call Barbie a best friend, and women who appreciate Barbie as a fashion and lifestyle icon.”

But two years on, it looks like Barbie is feeling rather unappreciated in Shanghai, and hasn’t been getting the love that she hoped for.

On Monday morning the vast Barbie store closed its doors, becoming the latest foreign brand to run aground in China’s retail sector.

Those who didn’t make it to Shanghai before the closing of Barbie’s dream house, missed out on a six-storey, 36,000-square-foot store drenched in pink neon. The outlet also featured a cosmetics department, a spa and a restaurant, as well as the world’s largest collection of Barbie dolls and Barbie-themed clothing. Missing it already?

Barbie’s parent Mattel hasn’t given a detailed breakdown on the reasons for the closure, but it was well known that sales had been disappointing. Targets were lowered by almost 30% in 2010, at least the third revision downwards since the store opened (see WiC41).

Paul French at retail research firm Access Asia reckons that Mattel may have overestimated Barbie’s local cachet: “They got massively carried away with that store,” French told the LA Times. “Retail is all about square-footage, and I never saw enough people there to justify its size. The rent there would have been big.” Analysts also say Mattel didn’t pay enough attention to local tastes. Locals prefer cute and girly clothing styles to the skimpier fare on offer at the store, for instance. The company also misjudged local spending power. Even its ‘target demographic’ has complained that the products were just too expensive.

Barbie’s bye-bye is the latest in a series of reports detailing American retailers’ struggle to connect with Chinese consumers (see WiC96, ‘Why some American firms fail in China’). Last month Best Buy anounced it would close all of its branded stores in the country. Home Depot, the US home improvement retailer, also shut its last store in Beijing early this year.

There are success stories too, of course (KFC and Starbucks would be on the list). And now Dunkin’ Donuts is also hoping to make good on its China mission. The American chain, which boasted about three-dozen locations on the mainland at the end of 2010, announced this week that China remains its top international target, and that it has ambitions to open many more stores.

But after watching other US retailers struggle, the chain is expanding cautiously. “I’m nervous about going all over China and then finding out we have issues,” Dunkin’ Brands chief executive officer Nigel Travis told the Wall Street Journal.

This is Dunkin’s second major run at the Chinese market, having pulled out of the country 10 years ago, complaining the locals didn’t like doughnuts. It returned in 2008, and now looks a lot more confident of making a go of it.

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