Sweden's H&M to shut Hong Kong store

AFP/The Local
AFP/The Local - [email protected]
Sweden's H&M to shut Hong Kong store

Swedish fashion retailer H&M has announced that it is closing its flagship downtown Hong Kong store due to high levels of rents being demanded in the city.


Five years after launching its first Chinese store in Hong Kong's Central district, the Swedish fashion house is closing the 2,790 square metre retail space, the Wall Street Journal reported.

H&M spokeswoman Cher Chui said the new tenant, clothing retailer Zara, had agreed to pay rent of $1.4 million a month, twice what H&M was paying.

"Retail in Hong Kong is so fast and always expanding, so shops do close and then open up elsewhere. This is quite common in Hong Kong," Chui was quoted as saying.

Tourism is a major source of retail revenue in Hong Kong, driven by spending from mainland Chinese visitors.

Limited new supply and strong retail sales in 2010 and 2011 saw retail rental growth of about 20 percent last year, exceeding the 2008 peak, according to Fitch ratings agency.

It said China's economic slowdown could see rents moderate in 2012, while remaining in "positive territory".

The prestigious shopping hub of Central is prized as a retail space as much for its branding opportunities as for its sales, but soaring rents have seen a trend toward "decentralisation" to other areas.

Chui said H&M had 12 shops in Hong Kong.

"Sales in Hong Kong and China are doing very well," she said.


Join the conversation in our comments section below. Share your own views and experience and if you have a question or suggestion for our journalists then email us at [email protected].
Please keep comments civil, constructive and on topic – and make sure to read our terms of use before getting involved.

Please log in to leave a comment.

See Also