International brands are pressing ahead with their expansion plans in Hong Kong even as consumer spending and tourists numbers have taken a hit from the social unrest in the city. And with the formal withdrawal of the extradition bill on Wednesday, there is a likelihood of the city returning to normality and boosting consumer confidence. In November, American seafood chain Red Lobster will open its first restaurant in Hong Kong’s Causeway Bay, one of the city’s busiest shopping districts which has been hit by the months-long protests. Cosmetic retailer Sephora opened a new store at the IFC Mall on Tuesday, after a nine-year absence in Hong Kong. “We feel very optimistic about how Red Lobster will be received,” said David Martin, chief operating officer at FWM Restaurants, adding that brands tend to do better when things are a little bit tougher. Tiffany says protests ‘taking a toll’ on its Hong Kong business as it reports drop in net sales in second quarter The company also runs two Red Lobster restaurants in Beijing and Shanghai, and operates Morton’s steakhouse and The Butcher’s Club in Hong Kong. On Wednesday, Chief Executive Carrie Lam Cheng Yuet-ngor said she would formally withdraw the controversial extradition bill that has caused nearly three months of increasingly violent protests in Hong Kong. The Hong Kong Retail Management Association said most of its members suffered a 50 per cent sales drop in the first three weeks of August. Sales had dropped 6.7 per cent in June from a year earlier. It warned many retailers will have to let go of staff or go under if the unrest worsens, and called on landlords to cut rent by half for six months. “Brands will keep coming into Hong Kong, as the city is an international spot after all,” said Terence Chan, senior director of retail at JLL, pointing to the arrival of high-end brands such as the largest MoMA design store in Asia as well as Yohji Yamamoto’s first concept boutique in Hong Kong at the K11 Musea. The shopping centre in Tsim Sha Tsui, which opened last week, has already reached an occupancy rate of more than 97 per cent, according to a K11 spokeswoman. “Despite the current situation in Hong Kong, we are confident about the long-term retail development in Hong Kong,” she said. “Since opening, the strong footfall at K11 Musea shows robust consumer potential.” More brands, such as Fortnum & Mason, will be opening at K11 Musea in due course. Fortnum & Mason, the queen’s favourite grocer, picks Hong Kong as foothold of its first Asian expansion in three centuries “The deals weren’t negotiated last month and executed this month. The deals have been discussed for a while and both sides had committed for a period of time. But the fact that they still honour their agreement, even in the current situation in Hong Kong, is a vote of confidence for the city’s retail market,” said Chan. Other market observers said that shops will still open, but a smaller number of employees may be deployed and will have to ride out the uncertainty. “They will need to find a way to retain their forecasted turnover or reduce their loss,” said Michael Chik Pa-fai, managing director at Sheraton Valuers. “Some retailers may be more optimistic … and find some opportunities or lower rent during this time. But in the short term, I think everyone is quite pessimistic,” said Mariana Kou, head of Hong Kong consumer research at investment house CLSA.