Falling sales and rising rents are forcing a shake-up of Hong Kong's retail sector as underperforming retailers are forced to shut outlets in prime locations and move to cheaper outlying areas.
The exodus has left retailers of luxury branded merchandise favoured by mainland buyers, such as watches and jewellery, to take up the space vacated by outlets that cater for lower-spending local consumers.
In some cases, changes in the local retail landscape are also triggered by events on the mainland, such as the country's largest electrical appliance chain, Gome Group, closing its 8,000 square foot flagship outlet in Mong Kok last month.
Gome chain has already shut three outlets in Central, Mong Kok, and Tseung Kwan O.
The chain's stores in Hong Kong are wholly owned by embattled retail tycoon Wong Kwong-yu, who is being detained by mainland authorities for alleged economic crimes.
Earlier this month, Hong Kong's High Court ordered the freezing of HK$1.66 billion worth of assets owned by Wong and his wife Du Juan at the request of the Securities and Futures Commission.
When Gome vacated its main shop in Mong Kok, its former landlord Francis Choi Chi-ming immediately put the premises back on the market for HK$2.5 million a month, 32 per cent higher than the rent the appliance retailer had been paying until it terminated the lease two months earlier than its expiry next month. Gome renewed the lease three years ago.
