Hongkong's Current "Luxury Store" Trend Is Likely To Spread To The Mainland.

In the past month, Hongkong

In the luxury market, it can be called black August.

France luxury group

M H's watch brand tiego Hoya closed shop in Tongluowan and pushed Hongkong down as the first Domino in Asia luxury center, August 31st.

H central flagship store was closed down two years ahead of schedule.

On the same day,

Belle, the flagship international brand, has its last business day in the last store in Tseung Kwan O.

At this point, the brand completely withdraw from the Hongkong market.

On the same day, the Royal watch and jewellery group of Hongkong signed an early lease agreement with Yu Rong.

If a month ago, the luxury store closing tide was just a worry, now it has become a fact of destruction.

Then people began to worry about whether the tide of closing shop would spread to the mainland.

In 2014, Hongkong's total retail sales amounted to HK $493 billion 300 million, down 0 .2% from the previous year, and for the first time in 11 years, the retail industry launched negative growth.

This decline did not improve in 2015. Retail sales in August 31st released by the census and Statistics Department of the Hongkong special administrative region showed that the total sales value of retail sales fell 2.8% in July 2015 compared with the same period last year, declining for 5 consecutive months, and significantly faster than the 0.4% year-on-year decline in June.

According to the sales value analysis of the main retailers, the sales value of jewellery, watches and clocks and precious gifts decreased by 5% compared with the same period last year.

As early as last year, HSBC analyst ErwanRam bourg predicted that in the minds of mainland consumers, Hongkong is losing its status as a luxury center. Hongkong will face a series of luxury stores closures in the next few years.

The latest quarterly earnings data of luxury brands show that this prediction is not necessarily alarmist.

Tigheuya, Coach and Belle have been closed. Zhou Dafu [micro-blog] intends to close 4 stores this year. The signing of the rent and rent reduction agreement by the king watches and jewellery has already opened up the store outlet for luxury brands in the second half of the year.

The continuous high rent or the direct cause of the closing of shops.

According to data from commercial real estate services, the retail rents in Tongluowan, Hongkong, in the first quarter of 2014 amounted to HK $43310 per square meter, which is nearly 3 times the rent in the core area of Paris.

The high rent resulted in a failure to negotiate with the owners and eventually decided to close the store.

The central flagship store closed by Coach is HK $7 million 200 thousand per month, and the early withdrawal of the property has saved HK $180 million.

At present, many Hongkong owners have to face the pressure of reducing rent.

In addition, more mainland tourists empathize with shopping destinations such as Europe, America, Japan and Korea, which also make Hongkong lose its attractiveness to the mainland's high purchasing power.

Retail sales of Harbour City, the largest shopping centre in Hong Kong, had fallen by 7.1% to HK $15 billion 600 million as of the end of June this year. The consumption trend of Hongkong's overall retail market is not difficult to see.

Tariff adjustment and changes in consumption structure may be the last straw in the Hongkong market.

In June 1st this year, the mainland lowered the tariffs on some imports. According to the retail sales results released by the Hongkong statistical department, sales of luxury goods declined, but sales of low and medium priced goods increased instead. Sales of food, alcoholic drinks and tobacco increased by 7% in July compared with the same period last year, and goods in supermarkets increased by 0 .4%.

This shows that the consumption structure of tourists has changed. They mainly purchase daily necessities.

The impact of such a shift on Hongkong shops has already appeared, and the activity of rental activities in the core area has declined, and the rental of the shops has dropped.

The 2014 China luxury market report released by Bain earlier this year showed that the mainland China's luxury market for the first time showed negative growth in 2014, down 1% from 2013.

In 2014, it was also the most popular store for luxury stores. H ugoBoss closed 7 stores, and Ferragamo and Zegna closed 6 respectively.

Close 4.

Slower growth in Greater China has led some luxury brands to continue to reduce or slow down their stores in 2015.

Data show that in the first quarter of this year, the number of Prada stores was 33, compared with 49 in 2014, while the number of Amarni stores decreased by 5.

The number of stores is 11, which is half of the largest number of stores.

Bruno LAN, Bain's global partner, has predicted that luxury brands will continue to adjust their distribution in 2015, including closing discount stores and authorized stores.

In 2015, the luxury brands in the Greater China region were not very good. It is not hard to speculate that the tide of shop closing is likely to spread to the mainland.