Hongkong'S Retail Industry Has Been Chased For Half A Year.

Following Coach's early withdrawal from the central bank last year, there are more international brands.

Choose to evacuate the commercial core area of Hongkong.

It plans to evacuate its 6 largest flagship store in Tongluowan in August next year, and the owner of the shop will rent half of it by Victoria 's Secret (Vitoria's secret).

From 2011, the United States quickly

The brand Forever 21 rented the most expensive shop in Hongkong at the time, the largest shop in the JINGWAH center, ground floor, and 1 to 4 floors of 5 to 19 Jardine street, Tongluowan, with a total area of 51188 square feet (about 4757 square meters). It is the first flagship store in Hongkong.

At that time, the rent for the first month was HK $11 million, and the rent was raised annually, up to HK $13 million 800 thousand per month.

In the past two years, the chill of Hongkong's retail industry has been pmitted to commercial real estate. The rents of Hongkong's most core areas or lots have been sharply reduced. For instance, the average monthly rent of the shops in Tongluowan, which was once the most favored by mainland customers, is only 4 million ~500 Hong Kong dollars, which is down by 30%~50% compared with the peak period in 2011. However, it is still difficult to retrieve the tenants who have decided to settle their decisions. This also includes many famous international brands such as Coach and Forever 21.

Half of the price of the shop was rased for rent.

According to Hongkong media reports, Forever 21 is the most expensive monthly Street rent shop owned by private owners in Hongkong. It is also the highest rent in all Forever 21 flagship stores worldwide.

Forever 21 signed a 6 year lease until August next year, which means that even if there is a 10 month lease, Forever 21 still needs to pay HK $138 million.

At the beginning of last year, there was market news. Forever 21 is trying to put the shop on the market to find the top rent. But because the new tenant needs to pay the high rent of Forever 21, even when the rents of the whole shops in Hongkong are falling, even if the international sports brands are ready to negotiate in time, the rent is too high.

Forever 21 is located in the 6 Tier flagship store in Tongluowan, and is the king of Hongkong.

By this year, Pu Wang was willing to lower his status.

According to sources, this shop has been pre leased by the US chain of women's underwear brand Victoria 's Secret (Vitoria's secret, hereinafter referred to as "Wei Wei"), but the new rent is only HK $7 million, the rent per square foot is HK $137, and the monthly rent is nearly half that of Forever 21.

This means that even if the owner of the shop is willing to reduce the rental price, Forever 21 will not be willing to continue to rent.

Ou Chun Jie, partner of business management consulting in Greater China, told the first Financial Daily reporter that when Forever 21 was founded flagship store in Tongluowan in 2011, it was at the golden tide of mainland tourists going to Hong Kong. The number of mainland tourists to Hong Kong in that year was about 30 million, and increased by 20%~30% per year. Tongluowan is a popular location for mainland tourists shopping. Therefore, the high rental rate of Forever 21 in Tongluowan is based on the significant growth potential of mainland tourists.

However, due to the sharp decrease in mainland passenger traffic over the past two years, the flow of people is worse than expected, and their income may not be enough to cover the cost of rents.

In fact, when Forever 21 was first opened in Tongluowan, it once attracted local consumers to rob, and the flow of people became so numerous that they even became a lot of "thieves".

However, since last year, the number of people in this shop has begun to decrease.

If the average price of Forever 21 clothes is 150 yuan, the daily Forever 21 will be sold in Tongluowan. This flagship store will sell 3066 clothes before it can be returned.

A crisis of prosperity and prosperity

Once upon a time, fast fashion brands were sought after by fans all over the world, but now they are beginning to go downhill.

Mr Cho Chun Jie said that the upsurge of "fast fashion" trend is also explaining why the Forever 21 brand is not performing well. At the same time, because of the increasing importance of consumers' quality of clothing, fast fashion brands are likely to face new challenges.

In fact, this phenomenon can be observed from brands like H&M and UNIQLO, and profits have been seen in recent years.

H&M group's earnings report showed that the global sales of the company in September only recorded a growth of 1%, the lowest growth rate in the past year, while the gross profit margin of the H&M group in the three quarter also dropped from 55.9% to 54%, and net profit fell by 9.2% to 4 billion 820 million kronor, which is the 54% consecutive quarterly decline in profits of the H&M group.

At the same time, according to the results of the 2016 financial year of Fast Retailing Limited (UNIQLO parent company), the company's net profit fell by 56.3% in the whole year of August 2016, especially in the second half of the fiscal year, and the net profit of the company fell by 80.9%.

Chun Chun Jie believes that the location of Forever 21 seems to have exceeded its needs. Although this is the first store in Forever 21 in Hongkong, shops help build brand image, but now the brand positioning has been established, and resource investment will shift from maintaining flagship stores to opening smaller stores.

However, the withdrawal from the shop does not mean that Forever 21 will be completely withdrawn from Hongkong. In May of this year, Forever 21 had just leased 10 and 11 shops and 1 to 3 floors of the underground shopping center of Mong Kok Sai Yeung Choi South Street, a total of 19217 square feet. The monthly rent of the shop was only HK $1 million 960 thousand, the rent was 86% less than that of the flagship store, and the average price of each dress was HK $150. Forever 21 only needed to sell 436 clothes per day, and it could be returned to the original.

The new store will replace its shop in Tongluowan and become its new flagship store in Hongkong. It has quietly started testing water in September this year.

Well, will the next lease be sold well? At present, there are 6 shopping malls in Hongkong and an airport store. The rental shop in Tongluowan JINGWAH center is expected to serve as the flagship store.

However, due to the sale of perfume in Hongkong, the market is expected to sell underwear products.

From the point of view of operation, it is also at a difficult stage. Its parent company L Brands group recently announced that the group's earnings per share in the third quarter were expected to be only $0.4, compared with the previous estimate of 0.4 to 0.45 dollars, if compared with last year's 0.55 US dollars, it fell by nearly 30%.

Under such pressure, whether or not it can base itself in Hongkong has also been questioned by many market participants.

Some market participants say that with Forever 21's warning, it may not succeed in Hongkong.