Global luxury retailer DFS Hong Kong, which operates duty-free shops, plans to expand its outlet in Tsim Sha Tsui by 40 per cent to cater for strong demand from mainland tourists. In strong contrast to the declining sales suffered by many retailers in the neighbourhood, DFS sales remain on an upward trend, according to Maureen Fung Sau-yim, the general manager for leasing at Sun Hung Kai Real Estate Agency. DFS Galleria, which sells prestigious international brands including Louis Vuitton, Gucci and Chanel, will rent an additional 35,000 square feet at Sun Hung Kai Properties' Sun Arcade in Tsim Sha Tsui. 'The group is proceeding with the expansion despite the deepening financial turmoil. We just signed the leasing agreement last week,' Ms Fung said. DFS Galleria's retail space at Sun Arcade, which generates shopper traffic of up to 120,000 visitors during weekends, will expand to 120,000 sq ft from 85,000 sq ft now. Ms Fung said retailers that remained in a strong financial position were able to take advantage of the economic downturn to expand in light of the declining competition for prime space and landlords becoming more flexible in discussing leasing terms. 'DFS Galleria will expand its cosmetics and jewellery and watch zone in a bid to capitalise on mainlanders' strong appetite for luxury goods,' she said, adding that cosmetics sales this month jumped significantly compared with December last year. As mainland tourists account for up to 50 per cent of DFS Galleria's sales, she said, the financial turmoil had a limited impact on its sales, and the retailer would add 17,500 sq ft of space this month and the remainder by the end of next year. After the completion of the expansion, DFS Galleria will account for 57 per cent of the 210,000 sq ft Sun Arcade, the biggest store in the shopping centre. Ms Fung declined to disclose the leasing terms but said the rents for the additional space to be committed to by DFS Galleria were higher than in previous leases. Currently, rents at Sun Arcade were HK$150 to HK$300 per square foot, she said. Aside from DFS, several global retailers are expanding their outlets. Spanish fashion retailer Zara will soon enlarge its store at IFC Mall in Central by 25 per cent to 16,000 sq ft. Sources have said Zara would close its IFC store on January 31 and the new store would open on April 1 next year. Rival luxury retailer Prada intends to expand from 2,800 sq ft to 8,000 sq ft, while Ferragamo plans to enlarge its space from 1,500 sq ft to more than 3,000 sq ft. Industry watchers said international brands tended to open fewer big shops instead of many small shops.