Jewellers say no to high rents forprime shop sites

Retailers selling luxury watches and jewellery are rejecting the idea of paying big premiums for prime street-front shops, as mainland shoppers spend less on expensive gifts.

Two years ago top-tier retailers were willing to pay 30 to 40 per cent above market rate for a prime shop to capitalise on an influx of mainland big spenders, said Joe Lin, an executive director of retail services at CBRE.

"As mainland visitors cut their spending in Hong Kong, they are growing reluctant to chase after high rents and landlords have to become more realistic in their asking rents," Lin said.

Some landlords are accepting below-market rates to attract a tenant.

Chu Yuet-wah, the chairman of Sincere Watch (Hong Kong), warned this month that revenue and net profit would decrease for the year ended March, because of the slowdown in the luxury market for watches.

Another firm, Oriental Watch Holdings, which sells top-end brands such as Rolex and Omega, also issued a warning, saying its operating profit for the year to March would be substantially lower than in the previous year because of the slowdown in the mainland economy, keen competition and an increase in general stock provisions.