French luxury giant Hermès International SCA is expanding its store in one of Hong Kong’s most high-end shopping malls, adding to signs premium brands are renewing their focus on the city as an economic slowdown weighs on the outlook for China.
The three-floor store in Causeway Bay’s Lee Gardens is undergoing renovations and is expected to reopen around mid-year with a much larger area, according to people familiar with the matter, who asked not to be identified because they’re not authorised to speak publicly. As part of the expansion, Hermès has taken over a neighbouring store on one floor, they said.
The shop will have an expanded offering of products including handbags and furniture, providing customers with better access to stock, one of the people said. Hermès currently has seven stores across Hong Kong, according to its website, including its flagship in Central.
The company didn’t immediately respond to a request for comment.
Hermès’ bet on Hong Kong symbolises a broader shift underway for some of the world’s biggest luxury brands. After pouring investment and resources into mainland China to capitalise on a Covid-linked shopping boom, a property-market meltdown and surging youth unemployment has seen many consumers — especially the aspirational middle class and moderately wealthy — tighten their belts.
That’s renewed the allure of Hong Kong, whose large concentration of ultra-wealthy residents are viewed as better able to weather uncertainty.
Hong Kong has already been quietly staging a comeback, reclaiming its title as the world’s top luxury spender per-capita last year, according to data from Euromonitor International. It had lost its no. 1 position to Switzerland and the United Arab Emirates after months of social unrest in 2019, then three years of stringent Covid restrictions, battered retail sales.
Other top brands are showing optimism about Hong Kong. Chanel last year rented a two-floor store in Causeway Bay for about HK$3 million ($384,000) a month, moving in following the slump in rental prices during the pandemic.
Meanwhile, Louis Vuitton, part of billionaire Bernard Arnault’s luxury conglomerate LVMH Moet Hennessy Louis Vuitton SE, opened a pop-up menswear store and cafe in January in the affluent Mid-Levels neighbourhood. The brand also hosted its first ever fashion show in the city in November. Fellow LVMH stablemate Dior is set to showcase its men’s pre-fall collection in Hong Kong in March.
By Shirley Zhao
Why Some Luxury Groups Are Doing Better Than Others
The slowdown in demand for high-end brands is hitting the sector unevenly, as seen in the polarised third-quarter results released this week by Hermès, Kering and others.