Even in the midst of a retail downturn, global retailers Abercrombie & Fitch, Prada, and Mango are making bold moves to expand their presence in Hong Kong.
SEE ALSO: Hong Kong retail sales contract 9.7 percent in June as tourist numbers continue to recover
Retail sales in Hong Kong dropped 9.7 percent to HKD 29.9 billion in June, after an 11.4 percent dive in May and a 14.7 percent contraction in April, according to the Census and Statistics Department. The figures marked the fourth consecutive monthly contraction following 15 months of uninterrupted growth after Covid-19.
Taking a long-term view, some retailers are pressing on with plans to rebuild or extend retail spaces in Hong Kong. Abercrombie & Fitch Co., a standout performer in the American stock market in recent times, is charting a comeback to Hong Kong after an eight-year hiatus.
“Hong Kong remains attractive to retailers. The government’s efforts to boost Meetings, Incentives, Conventions, and Exhibitions (MICE) activities, along with the city’s simple and low tax regime and solid legal system, retailers have confidence in the Hong Kong market,” said Lawrence Wan, senior director of advisory and transaction services for retail at real estate firm CBRE.
Abercrombie & Fitch downsized its Hong Kong presence in 2016, giving up a coveted space in Central’s Pedder building.
Bloomberg earlier revealed that the apparel brand has now secured two expansive retail spaces in prime locations across Hong Kong: a 7,000 square-foot space in Causeway Bay’s Hysan Place as well as a sprawling 10,000 square-foot lease in Sha Tin’s New Town Plaza.
Abercrombie joins a cohort of global brands eager to capitalise on the city’s robust spending potential and anticipated recovery from the dual blows of political unrest and pandemic-induced disruptions.
Said CBRE’s Lawrence Wan, “Luxury brands are more inclined to expand or upgrade their stores, while F&B brands catering to the mass public have also been expanding in the first half of 2024.
Retailers are primarily focusing on core retail districts and major shopping malls, including New Town Plaza in Sha Tin, where they can benefit from high foot traffic in vibrant areas,” Wan continued.
Reports suggest that Abercrombie will shell out approximately HKD1.5 million (USD192,340) per month as rent for its coveted space in Hysan Place.
As reported by Retail in Asia, Spanish retailer Mango also recently secured a sizeable 19,000 square-foot unit in Central’s Asia Standard Tower, at a reduced rental rate.
Prada is also poised to unveil a new 8,000 square-foot store in New World Development’s K11 Musea mall sometime in 2025.
Hongkong Land, the largest commercial landlord in Hong Kong’s Central district, unveiled plans to invest USD400 million into a project that will elevate its Landmark assets into a luxury boulevard to rival, or “to be compared favourably,” with other global luxury retail destinations Avenue Montaigne, Bond Street, Fifth Avenue and Ginza.
SEE ALSO: Sotheby’s unveils new maison at Landmark Chater in Hong Kong
Landmark’s transformation will unfold over the next three years, with anchor tenants including Cartier, Chanel, Dior, Hermès, Louis Vuitton, Prada, Saint Laurent, Sotheby’s, Tiffany & Co. and Van Cleef & Arpels set to upgrade and expand their boutiques. The total investment was estimated at USD1 billion.