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.