HK's strategic location outweighs high shop rents, says MCM
German luxury goods company MCM Products, which took over home-grown retailer Episode's shop to open its flagship store in Central, said the strategic position of Hong Kong as a gateway to the mainland would outweigh the cost of high shop rents in the city.
Global brands would be undeterred by rising rents, it said.
'Hong Kong has always been an important and strategic city for luxury brands because it is international and it is where trends start. It is uniquely positioned as a gateway to China,' said Alex Tang, head of sales and marketing for MCM. 'There are many factors to consider in planning business expansion and rent is only one of them. The merits of having a presence in the world's top cities and the opportunity to appeal to some of the world's most devoted customers may well outweigh the cost of high rents.'
Hong Kong was therefore a strategic expansion point for MCM, Tang said.
The company, owned by the Korean-based Sungjoo Group, will open its largest outlet in the world later this year in the Entertainment Building in Central. Property consultants believe MCM is paying about HK$2.4 million a month in rent, but the company has not commented. It opened its first store in the city in Tsim Sha Tsui.
Episode closed its Central store on February 13 after the company failed to agree on the owner's revised asking rent of around HK$2.4 million a month. That represented a 70 per cent rise from the old lease.
Tang said the decision to expand in Hong Kong was prompted by the sharp growth in the sales of luxury goods, backed by wealthy Hong Kong buyers and affluent mainlanders.
'MCM has a presence in the world's most stylish cities in 27 countries. We have seen robust growth in the luxury fashion market in Hong Kong, and it is very strategic for MCM to establish a strong presence here as we plan to expand into the mainland.'
Tang said while the company targeted local buyers, mainlanders would comprise a large part of its customer base. As long as Hong Kong kept its unique identity and charm it would always be a top destination for the world's travellers, he said.
MCM now has two stores in Shanghai, one in Three on the Bund and the other at Hong Kong Plaza. 'We are planning to open a new store in Shin Kong Place in Beijing and other cities in the near future,' sad Tang.
Apple, the maker of iPhone and iPad, will open its first 15,000 sq ft Apple Store at IFC Mall, in Central, by the end of this year, people familiar with the plan said. In the third quarter of next year, Apple plans to open a 20,000 sq ft store at Hysan Place in Causeway Bay.
United States-based fashion retailer Forever 21 is taking up space soon to be vacated by Giordano in Capitol Centre in Causeway Bay.