Louis Vuitton to shut Hong Kong store as rent and protests bite
Louis Vuitton, the world's biggest luxury goods brand by sales, is preparing to shut one of its shops in Hong Kong, where protests have hit demand as high rental costs bite.
The handbag firm plans to close its store in the city's Times Square mall, the South China Morning Post reported. The company has eight shops in Hong Kong, and the decision came after the group failed to reach an agreement with its landlord to cut the rent in the mall outlet.
Wharf Holdings, the shopping centre's owner and Vuitton did not immediately respond to requests for comment. Vuitton's parent group LVMH, the Paris-based conglomerate behind other fashion brands like Christian Dior and Hennessy cognac, declined to comment.
High-end fashion labels have watched as anti-government demonstrations escalated last June, hoping the turmoil would ease in one of the world's top shopping destinations.
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Until now, the luxury brands had only shut stores in Hong Kong temporarily when protests flared.
Hong Kong has long drawn numerous tourists from the Chinese mainland, who pick up luxury cosmetics, accessories and clothing at slightly lower prices than at home.
But as the protests dragged on, tourist arrivals slumped and losses began to trickle through to third-quarter earnings. Hong Kong's retail sales fell 23.6pc from a year earlier in November to HK$30bn (€3.45bn), government data showed on Friday, in the 10th consecutive month of declines.
The protests have spilled into 2020, with some 400 people arrested in New Year's Day demonstrations when a pro-democracy march descended into chaos. Some brands are weighing up redirecting some of their investments elsewhere, including to the Chinese mainland and other parts of Asia.
Executives at LVMH and its rivals like Moncler or Gucci owner Kering have said they were trying to renegotiate notoriously high rents in Hong Kong as one way of mitigating the hit to operating margins.