(Yicai) May 27 -- Italian fashion house Gucci plans to shut down its third store in Shanghai this year, prompting customers to rush to buy the remaining items in stock.

Gucci will shut down its store in the Shanghai Bicester Village outlet in Pudong New Area on June 2, Yicai learned during an on-site visit.

The Florence-based firm closed two flagship stores in February, one at the Réel Department Store in Jingan district and the other at the New World Daimaru Department Store in Huangpu district.

Once the Bicester Village store is closed, Gucci will only have two remaining outlet stores in Shanghai, one at Florentia Village in Pudong and one in Bailian Outlets Plaza in Qingpu district, and seven regular stores, including its flagship store at Plaza 66 in Xuhui district.

Gucci had earlier ramped up investment in outlet stores, boosting its short-term performance but disrupting its pricing system. In 2023, its former chief executive officer announced that the company would cut its reliance on discount channels, exit the outlet market, and focus once more on brand value and full-price sales.

Reducing the number of stores, particularly outlet stores, is crucial in Gucci's upscale transformation. But its closure of outlet stores had mainly affected European markets before. The decision to target stores in China, which was once regarded as a core market, underscores the challenging circumstances the brand is facing.

Gucci has accelerated store adjustments in China since last July, when it closed four stores in Fuzhou, Dalian, Shenyang, and Taiyuan.

In the first quarter of this year, Gucci's revenue plunged 25 percent to EUR1.6 billion (USD1.8 billion) from a year earlier, marking its lowest quarterly revenue in recent years.

Gucci's prolonged operational difficulties have also dragged down the performance of its parent company Kering.

The French luxury group's first-quarter revenue fell 14 percent to EUR3.9 billion from a year earlier, with a 25 percent decline in Asia-Pacific, 13 percent in both Europe and North America, and 11 percent in Japan. Kering closed 25 stores globally in the three months ended March 31, including 10 Gucci stores.

The broader slowdown in luxury market growth has exacerbated challenges for Gucci and Kering. At the end of last year, Kering's net debt exceeded EUR10 billion (USD11.4 billion), leaving it with the weakest financial situation among the world's four largest luxury conglomerates.

Editor: Futura Costaglione