Rethinking Hong Kong's luxury future
Political unrest in Hong Kong has restarted over China’s new security law, marking almost a year of disruption.
Luxury brands including Prada, Valentino, Tiffany & Co. and Chow Tai Fook have already permanently closed retail outposts in the city while others are reevaluating their presence. With new tensions flaring up, both on the streets of Hong Kong and internationally, and tourism (the biggest driver of sales) not likely to recover any time soon, brands are cautiously looking at the future of their long-term footprint, say property agencies and retail consultancy groups, casting doubt over the sector’s future.
“Some [luxury] brands have already quit the Hong Kong market to focus their attention on mainland China,” says Daniel Wong Hon-shing, CEO of property agency Midland IC&I, one of Hong Kong’s biggest property agents. “Most of the brands are in the Hong Kong market just because it is good for the mainland region. When they have already established their brands in Hong Kong and in the heart of the mainland residents, they have no need to station their retail shops in Hong Kong anymore.”
The protests will likely continue, says Albert Park, head of the department of economics at the Hong Kong University of Science and Technology. The approval of the security law might lead to another six to eight months of protests. If Park’s forecast materialises, companies that might have thought the disruption was temporary in 2019 could be pushed to make more drastic decisions.