Letters | Two sides to a luxury retail trend in Hong Kong

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The retail sector in Hong Kong, specifically the upper middle echelon, has faced challenging undercurrents for several years now. During the pandemic, the government’s Employment Support Scheme and the forecasted return of mainland tourists extended a measure of hope. However, the change in mainland tourists’ travel behaviour has ushered retailers into a stark new reality.

More accessible luxury retailers are having to contend with shifts in local consumption patterns, as well as exclusivity strategies by luxury brands.

A prime example is Harvey Nichols, a distinguished name in the field. In 2018, the high-end department store deemed it necessary to halve its retail space in Pacific Place in Admiralty and five years later, it has announced a complete retreat from Landmark in Central.

The second group, the aspirational shoppers or “Henrys” (high earners, not rich yet), are inclined to splurge on luxury items in times of economic prosperity. However, this demographic has been affected by the bearish economic climate. Such shoppers appear to have redirected their expenditure towards reasonably priced yet tasteful boutiques, exploited the weaker yen during trips to Japan, pursued online discounts or simply increased their savings. Consequently, their patronage of establishments like Harvey Nichols would have declined.