Why Hong Kong is still attractive to international retailers

Hong Kong is still an appealing destination for international retailers, especially mid-market brands which see the recent slowdown and rental decline as an opportunity to get a business presence in the city, according to property consultants.

“In some prime locations, rents have dropped more than 40 per cent from their peak in the second half of 2014. Some retailers, which failed to compete against luxury brands to get a shop in Hong Kong in the past. see this as an opportunity,” said Joe Lin, executive director, retail services, for CBRE Hong Kong.

Sportswear brands are very active and have plans to expand, he said.

As an example, Adidas took over Coach’s coveted spot in the middle of Central’s business district, and opened another flagship outlet in Fashion Walk in Causeway Bay early this month.

“Hong Kong ‘s retail market suffered across the board when in 2003 when Sars broke out, or after global financial crisis in 2008. But now the city only sees a slump in retail sales of luxury products,” said Lin.

The latest government statistics showed Hong Kong’s retail sales dropped 12.5 per cent in the first three months of this year, the poorest first-quarter performance since 1999. March’s retail sales value was down 9.8 per cent year-on-year and demand for jewellery and watches fell by more than 20 per cent. The government said the slowdown in inbound tourism continued to be a severe drag on retail sales.