What brands should know about Hong Kong’s retail slump

For more China-focused finance coverage, subscribe to the Jing Finance newsletter for the latest news, business updates, global analysis, and trends shaping financial markets. What happened Hong Kong’s retail sector continues to face headwinds, with sales falling 2.3% year-on-year in April. The drop comprises yet another setback in what has been a challenging 2025 for the city’s consumption-driven economy. So far this year, total retail sales have declined 5.6%, with even typically resilient online spending shrinking by 3.5% in April. High-ticket categories such as motor vehicles and furniture were especially hard hit, down 53.4% and 16.7%, respectively, highlighting growing consumer caution. But sectors like medicines and cosmetics posted a 7.2% increase, signaling some resilience. Prince Jewellery’s $281,000 rent shock: A symbol of crisis A headline reflecting this retail decline in Hong Kong came last month when it was announced that after 21 years, Prince Jewellery will be vacating its iconic Russell Street store in Causeway Bay, once deemed the most expensive shopping strip in the world. The move follows a staggering 100% rent hike, with the landlord reportedly raising the monthly rent to HK$2.21 million ($281,636), according to local property agents. On a broader scale, according to the National Bureau of Statistics of China, the region’s economy overall expanded 5.4% YoY in Q1 2025, driven by strong industrial output, steady services growth, and stable domestic demand. The Jing Take For global brands and retailers eyeing Hong Kong, the city’s post-Covid retail recovery has been anemic. Citing Covid-19 restrictions, Valentino, Tiffany & Co, Joyce, and Coach closed flagship stores in the city in 2022. Luxury conglomerates have also been adjusting their regional footprint accordingly. In 2023, LVMH reallocated key resources from Hong Kong to mainland China, targeting cities like Shanghai and Shenzhen where consumer demand was more robust. Among recent retail news in Hong Kong: Chinese fast-fashion giant Urban Revivo has opened its debut store; Cristiano Ronaldo is opening a CR7 Life flagship store and holding a museum exhibition; and Hypebeast’s HBX store has unveiled a new flagship at Hysan Place in Causeway Bay. It seems there is a lack of luxury, and a pivot of more accessible, youth-focused offerings. Pop-up retail is emerging as a low-risk way to engage with Hong Kong’s consumers. For instance, Fenty Beauty debuted a cinematic concept store in Causeway Bay’s Times Square in May, homegrown label Cafuné is operating a limited-time store at IFC Mall until June 6, and Crocs has teamed up with Lane Crawford for a personalization-driven experience, also this month. Structural vs cyclical: Understanding the root causes Hong Kong’s retail decline can be attributed to a confluence of structural and cyclical challenges that have reshaped consumer behavior and business viability since 2020. Tourism-wise, Hong Kong continues to fall behind other parts of East Asia, which is significantly impacting its quest for growth. While tourism and China’s economic strength remain key pillars of support, sustainable growth will depend on rebuilding local confidence and adapting to shifting spending habits. 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.

What brands should know about Hong Kong’s retail slump

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Published June 04, 2025

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What brands should know about Hong Kong’s retail slump