What happened
Hermès is betting on Hong Kong’s luxury market once again. The French luxury house is renovating its Causeway Bay retail space at Lee Gardens, and planning to reopen the three-story shop as a larger space by the middle of the year.
The renovated shop will offer a greater range of products from Hermès collections including furniture and leather goods such as handbags, reports Bloomberg. The luxury retailer operates seven stores across the city, which is home to the highest number of High Net Worth Individuals (HNWI) in the world based on the total population of HNWI globally, according to the 2023 World Ultra Wealth Report.
The Jing Take
Is 2024 the year of Hong Kong’s comeback as a global luxury mecca? Dior, Chanel, Louis Vuitton, and now Hermès are at the helm of global luxury brands leading the city’s retail resurgence. The city’s retail rebound has been happening incrementally over 2023, with the government reporting a 16.2 percent growth in the year.
Meanwhile, neighboring mainland China battles an economic slowdown, sparked in part by the collapse of once-promising property empire Evergrande, with local consumers having become more cautious about conspicuous spending, while younger generations look to trends such as “exquisite poverty” to satiate their appetite for luxury.
Yet, it seems Hong Kong, often seen as a gateway into China (and vice versa), has been making a comeback after years of economic uncertainty and socio-political turmoil amid the 2019-2020 pro-democracy Hong Kong protests, as well as a more recent exodus of brands due to years of prolonged Covid-19 lockdowns.
Luxury department store Harvey Nichols shut down last year, while retailers including Tiffany & Co, Valentino and Burberry have shuttered a few stores, according to reports. But things are looking up with the return of mainland tourism and shoppers looking for duty free deals, as well as a policy shift to cultural tourism in the city. While retail and consumer sentiment in Hong Kong has yet to rebound to 2019’s levels, luxury brands have been keen to re-enter the region following the Special Administrative Region’s reopening.
Among them, Dior is showing its men’s pre-fall collection in the city this March, on the back of Louis Vuitton debuting its first show in the SAR in November last year.
Tsim Sa Tsui-based retailer K11 Musea saw footfall rise by 120 percent from pre-pandemic levels, while luxury sales saw a 260 percent increase according to data released in August 2023. The New World Development-owned luxury retailer said almost 30 percent of its tenants experienced record-breaking sales, according to the same report.
The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.