The negative impact of Hong Kong rents on luxury retailers
Hong Kong’s economy has been shaky ever since the Occupy protests, with spending down across the board. What was once deemed a blip now looks to be a problem that may have long-lasting effects. Luxury giant Kering, which owns Italian brand Gucci, has been in a dispute with Hongkong Land over its sky-high rent, and says it might consider closing stores in the region if the problem isn’t resolved, as reported in the Post last week.
Burberry, also experiencing falling sales, has expressed similar intentions, while watch brand TAG Heuer announced recently that it’s closing its Russell Street store in Causeway Bay owing to high rent.
Hong Kong used to be a sure thing for big fashion and luxury stores. This new uncertainty is creating a general lack of confidence in the economy. If even these luxury giants, usually supported by steady, enthusiastic mainland spending, are wobbling, what does this mean for other fashion brands and stores?
Those that have always felt the pinch of Hong Kong’s cutthroat rents are the small businesses and indie labels. Not only have they been overshadowed by multinational luxury giants in terms of consumer recognition and spending, they’ve also been either squeezed out of up-and-coming areas or never given a chance to open a shop in the first place.