Hello Kitty, farewell Rolex as Hong Kong shoppers go downmarket | The Edge Markets

Hello Kitty, farewell Rolex as Hong Kong shoppers go downmarket | The Edge Markets: "(Oct 28): In Hong Kong, fancy purses are out, sneakers are in.

US luxury handbag maker Coach Inc. opened its four-story flagship store in the heart of Hong Kong’s Central district to much fanfare in June 2008, with a celebrity-studded, champagne-fuelled party. In August, the company quietly terminated its HK$5.6 million ($1 million) per month lease and Adidas is moving in -- paying 23% less in rent, according to Colliers International Group Inc.

This is not an isolated case. Russell Street in Causeway Bay, which boasted the most expensive shop rents in the world until New York’s Fifth Avenue overtook it a year ago, is undergoing a major transformation. A location formerly rented by Emperor Watch & Jewelry that sold diamond-studded Cartier watches is now home to discount cosmetics retailer company Bonjour Holdings Ltd. that sells HK$58 packets of Hello Kitty false eyelashes and HK$18 jars of Tiger Balm ointments. Next door, rival Colourmix Cosmetics Co. has moved into a space vacated by Swiss watchmaker Jaeger-LeCoultre.

As Kering SA’s Gucci, LVMH’s Louis Vuitton, and jewelry chain Chow Tai Fook Jewelry Group bargain for lower rents or close stores amid a decline in mainland tourists who had underpinned their sales, mid-tier retailers are filling the gaps. Brands that appeal to the broader market are taking advantage of declining leases to move into some of Hong Kong’s most coveted retail locations.

“The fallout in the watch and jewelry as well as luxury sector is paving the way for fast fashion brands to expand,” Tom Gaffney, head of retail at Jones Lang LaSalle Inc. in Hong Kong, said in a phone interview."



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