Burberry joins Prada, La Perla in exiting Hong Kong’s Russell Street, once the world’s most expensive retail rental strip
- The British fashion brand has maintained a presence on Russell Street since 2012, occupying 5,200 sq ft of space in Soundwill Plaza
- Burberry denied local media reports that it was moving to a new location in WTC shopping centre
The iconic brand, known for its trademark check pattern, has maintained a presence in the Causeway Bay shopping district since 2012, occupying 5,200 square feet of space across two levels at Soundwill Plaza. It initially paid HK$7.7 million (US$988,000) per month, which was later increased to HK$8.6 million in 2015 amid the retail boom, according to sources familiar with the matter.
“With no mainland tourists, international brands are finding it hard to repeat sales achieved three years ago,” said Michael Chik, managing director of Sheraton Valuers, which specialises in sales and leasing of commercial properties. “Now, retailers have ample choice as there are so many empty spaces on Russell Street and nearby areas that are being offered at cheaper rents.”
Chik said that the landlord, Soundwill Holdings, had cut the rent for the existing lease due to expire early next year, but was unsure of the current rate. Soundwill declined to comment.
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It has been reported in the local media that Burberry will move to the nearby WTC shopping centre on Gloucester Road, a nine-minute walk from Russell Street. The company said it’s not moving to WTC.
Burberry will be the third major international brand to close its flagship store on Russell Street. The Italian fashion label Prada started the trend, shutting its 15,000 sq ft outlet in June 2020, followed by lingerie maker La Perla three months later in September.
Burberry, however, said early this month that it would continue to build its new concept stores across the world.
“We have no intention to significantly reduce the footprint of our stores,” Julie Brown, chief operating and financial officer, said during a media call on November 11 to discuss the half-year earnings.
“Burberry has always been one of the biggest innovators in digital, and we continue to put a lot of emphasis on digital channels,” she said. “That being said, since stores have reopened, we have found that consumers still value the luxury experience in a physical store.”
This means that the key to success is an omnichannel approach, which provides a seamless experience for consumers, whether they shop in-store or online, she said.
“We think omnichannel is really the way to create a truly luxury experience with personalised service, while at the same time allowing us to focus on local consumers in our key markets,” she said.
