H&M Hongkong Flagship Store Closes

Due to the increase in the retail store rents in Hongkong,

Retailer H&M announced that it would close its flagship store in the Hongkong business district.

Just five years ago, H&M launched a big publicity campaign for the store.

In 2007, the Swedish brand opened its first store in Central District, Hongkong, almost igniting the excitement and expectation of all.

At that time, the subway and tram in Hongkong were everywhere advertised for the opening of the store.

In order to become the first customers to enter the shop, people queued up outside the shop early every day for a few days.

Today, the brand says it will close the store with an area of about 2800 square meters next autumn.

After that, it will become a Zara store.

Zara's brand strategy is similar to that of H&M, and is famous for its popularity in price and the speed of updating goods.

H&M spokesman Cher Chui said the company did not agree with the landlord.

Zara will pay $1 million 400 thousand a month, which is two times the rent that H&M currently needs to pay.

CB Richard Ellis, a commercial real estate consultancy, said the retail store in Hongkong was at the highest level in the world. It has risen 19% since 2011, and the annual rent per square foot has reached 3864 dollars.

In the first quarter of this year, the rent in the central region rose by 6%, according to a report by Colliers International, a real estate brokerage firm.

Cher Chui mentioned H&M's decision to close the flagship store, saying that this is not uncommon.

The retail industry in Hongkong is developing so fast and has been expanding, so there are shops that are closed and then opened elsewhere.

This is very common in Hongkong.

She added that the staff of the company will not be affected, and the staff in this store will be sent to other stores.

H&M currently has 12 stores in Hongkong and 80 in the mainland.

Cher Chui said the sales performance of the company in Hongkong and the mainland is very good.

Zara declined to comment.

Five years ago, H&M was in.

One of the first international fashion brands to open stores is to break the tranquil tranquility of the Queen's main road, which is mainly occupied by banks.

Helen Mak, director of international retail services at Kali, said that since the H&M opened many popular stores in Queen's road, passenger traffic in the region has increased at night and on weekends.

Helen Mak says H&M is the pioneer.

After H&M, more and more international brands are opening up in the commercial area, including Coach, Diesel Jeans and GAP.

Millions of mainland Chinese tourists who buy luxury goods in Hongkong have helped boost this trend.

Mak said that the area around H&M has never been a shopping destination for locals, and business is driven by tourism.

Many international brands are familiar with such a process: opening a large hardcover storefront in Hongkong, building brand prestige among mainland tourists, and then go all the way to the mainland market.

But as Hongkong's retail industry slowed down, retail sales and sales in Hongkong fell to its lowest level since 2009 in May.

Lin Junming, director of retail services at the world bank, said that some brands decided to bypass Hongkong and directly enter the mainland market.

Most luxury retailers are conservative now, Lin Junming said.

In the past, retailers were willing to rent the gold lot at a price higher than the market price of 30%. Even three or four months ago, most people were unwilling to do so.

A series of similar incidents occurred before H&M announced the closure of the flagship store.

In 2010, Forever 21 was in.

The store of Giordano (Giordano) was paid two times the rent.

Last year, Abercrombie & Fitch acquired the same store that was originally leased by Shanghai Tang in Shanghai.

Shanghai is a luxury brand in China. Its store is located in a historic commercial building in Hongkong business district.