After jewellery brand Tiffany & Co. confirmed that it would shut its shop on Hong Kong’s Canton Road, one of the most expensive commercial real-estate locations in the city, Italian fashion label Valentino has become the second top luxury label to close a flagship store in the same location, effective immediately.
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Canton Road, along with Russell Street in the neighbourhood of Causeway Bay, was until recently one of the world’s most important locations for luxury brands worldwide. The retail strip is one of the main commercial arteries in Tsim Sha Tsui at the tip of the Kowloon peninsula, and has long attracted wealthy shoppers from China who, until recently, were lining up outside the boutiques of luxury giants such as Hermès, Chanel and Gucci. The Italian luxury brand announced the closure on 6th April.
Tiffany & Co. and Valentino join a list of international and local brands such as Prada, Omega, Hong Kong cosmetics chain Sasa and jeweller Chow Tai Fook that have not decided to renew leases for some of their stores after months of anti-government protests that began in the city in June 2019 and have hit the retail sector extremely hard.
Retailers are now struggling even more amid the coronavirus outbreak, which has kept travellers away from Hong Kong and caused the government to implement measures such as banning gatherings of more than four people.
The Hong Kong government reported a record drop in retail sales of 44 per cent year on year in February, to HK$22.7 billion (US$2.93 billion). The luxury sector was particularly affected, with sales of jewellery, watches, clocks and valuable gifts down 58.6 per cent in January and February compared to the same period last year.
The Valentino store is part of the formerly thriving Harbour City mall, owned by Wharf Real Estate Investment Corporation (Wharf Reic), which agreed to a 50 per cent rent reduction for some tenants in the mall.
Wharf Reic also owns the Times Square mall in Causeway Bay where, as first reported by the Post, Louis Vuitton, part of the giant LVMH luxury group, had planned to close its store because of the developer’s refusal to lower the rent.
The Post has subsequently learned that Louis Vuitton has been in talks with Wharf Reic to negotiate a rental reduction of up to 40 per cent for the Times Square store.
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Following the closure of its Canton Road store, Valentino will have six retail outlets in Hong Kong.
(Source: South China Morning Post)