China Puts Major Retail Hub Chengdu Under Citywide Lockdown

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SHANGHAI — The Southwestern hub of Chengdu was put under sudden lockdown Thursday evening, as the city’s 21.2 million residents were ordered to stay within the confines of their homes beginning at 6 p.m., the local government said in a statement.

The lockdown comes as the city reported 157 new COVID-19 cases Wednesday.

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Citywide mandatory COVID-19 tests will be carried out from Thursday to Sunday. Households are allowed one person out daily for grocery shopping with a valid COVID-19 test within the last 24 hours.

Authorities ordered all businesses to shut down except for supermarkets, pharmacies and hospitals. The lockdown is the most severe since Shanghai’s two-month lockdown in April.

As a result, major luxury shopping malls, such as Sino-Ocean Taikoo Li Chengdu and Chengdu IFS, were forced to close as of Thursday.

Due to strict lockdown control, Jaeger-LeCoultre canceled a planned event in the city, while Bottega Veneta has plans to postpone its September pop-up event, according to industry insiders.

Jefferies counts Chengdu as the fourth most important luxury hub in China. With roughly 6 percent of mainland China’s luxury stores in Chengdu, the megacity contributes about 7 to 8 percent to mainland Chinese luxury retail.

Chengdu quickly became a bright spot for luxury and fashion brands in the country for the first half of the year, as sudden lockdowns in major retail hubs like Beijing, Shanghai and Shenzhen continued to hamper consumer appetite.

But due to COVID-19-related outbreaks in July and a severe power shortage, total retail sales of consumer goods in Chengdu dropped 0.5 percent year-over-year to 530.69 billion renminbi, or $76.8 billion during the first seven months of the year, according to data from Chengdu Municipal Bureau of Statistics.

Sporadic lockdown measures have recently been imposed in the southern megacities Shenzhen and Guangzhou, the northern port of Dalian and Shijiazhuang of Hebei province in Central China, as the country sticks to Beijing’s strict zero-COVID-19 policy ahead of the 20th Party Congress in October.

Set to start on Oct. 16, the key political meeting is widely expected to see Xi Jinping secure an unprecedented third term as China’s leader.

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