When luxury brands are closing their shops in Hong Kong ahead of their leases expiring, the fashion world takes notice.
US accessories giant Coach shuttered its flagship store in Central Mall in August and more
recently Emperior Watch and Jewellery announced it would close its 1,700 sq ft shop in Causeway Bay, both pulling from their lease two years ahead of expiry.
Luxury malls are making way for mid-range brands
In response to the changing luxury climate Hong Kong’s shopping mall operators and street landlords are expected to diversify their tenant mix instead of chasing after luxury brands to counter the slowing demand from mainland Chinese tourists.
Some malls that have restructured with a wider range of emerging brands and lifestyle options have withstood this year’s weak retail sentiment, according to South China Morning Post.
Analysts expected more new foreign brands, particularly mid-rage retailers in sport apparel and fast fashion, will open shops in Hong Kong, and could attract new shoppers on the hunt for fresh and young brands.
Street retail rents in major shopping districts have fallen to the mid-2011 level, according to Colliers, and are expected to drop another 15 percent for the rest of the year.