Resist High Rents Or Carry Out Violent Prada Or Close The Biggest Store In Hongkong?

The violence since mid June has made Hongkong's economy in a downward spiral worse. A spokesman for the Hongkong Special Administrative Region government said that the retail industry in July was further declining and the decline was widened. In July, total retail sales fell by 13% year-on-year.

Due to the continuous reduction of passenger traffic, Italy luxury brand Prada will close its flagship store located at 2000 Russell street, Hongkong. It is reported that the flagship store has a daily rental of HK $300 thousand per day, and the annual rent will be HK $108 million.

The Hongkong retailers Management Association also appealed to all shop owners in the city to rent down 50% of the tenants for 6 months. Recently, the times went to Tsim Sha Tsui near Hongkong, and many shops were closed during the day. The number was written down to reduce rent.

Violence affects Hongkong's economy, the transfer and closure of core business circle shops

Since June, Hongkong's retail industry has been seriously affected by violence. In August 27th, he visited the shops in Tsim Sha Tsui in Hongkong and found that there were few people on the roads. Many shops closed and posted notices such as "Wang Pu" and "XX (intermediary)".

According to the data released by Zhongyuan Real estate, in July, about 54 business transactions were completed in Hongkong, with a turnover of about HK $1 billion 553 million, down 10% and 68.93% respectively from last month. Data also showed that in April this year, the volume and volume of business volume in Hongkong reached a peak, and then declined from July to July.

Italy's luxury brand Prada will close its flagship store at Plaza 2000, Russell street, Hongkong, due to the escalation of violence, resulting in a reduction in passenger traffic. The 7 year lease will expire in June next year. The two sides have decided not to renew their contract. It is reported that this is Prada's largest flagship store in Hong Kong, covering an area of 1393 square meters, with a daily rent of HK $300 thousand, that is, the annual rent is HK $108 million, and the rent of Hongkong core business is expensive.

According to the latest report of real estate consultant Cushman&Wakefield, Russell street in Causeway Bay, Hongkong, has a rental of up to US $2671 per square foot, or HK $20833.

Some analysts point out that in Hongkong, where demand is weak and rents are high, the flow of tourists from mainland China to Hong Kong will drop sharply, or more luxury fashion stores will be closed.

In contrast, it is obvious that after the times, he often saw a long queue outside the luxury stores outside the Tsim Sha Tsui area, and almost all the queuing people were tourists from the mainland.

Not only luxury stores are affected, but street shops are also affected. In August 31st, violence began in parts of Hongkong, and all the seafood street in Des worth Road West near Sai Ying Pun had been closed down. According to media reports, about 100 more seafood shops have been closed on the whole day, with only sporadic convenience stores. The snack bar is still open. There are few pedestrians in the street.

Yongchang seafood company posted a notice at the door: "this is a day off in August 31st." Nearby shops also posted "the lease expires, the goods are cleared, the seafood is sold, the cost is not considered, and the goods are determined to be cleared".

The total retail sales in July dropped by 13%, and the retail association appealed for half the rent.

In August 30th, the census and Statistics Department of the Hongkong Special Administrative Region announced that the estimated value of total retail sales in July this year was HK $34 billion 400 million, which was 11.4% lower than that in 2018. After deducting price changes, the provisional estimate of total retail sales in July 2019 dropped by 13% compared with the same month in 2018.

According to the category, the sales value of jewellery, clocks and luxury gifts (luxury goods) fell by 24.4% over the same period in July 2018. This is the biggest casualty of this incident, the first decline, 17.4% decline in electrical and other non durable consumer goods, 16.1% decline in pharmaceuticals and cosmetics, 13% in clothing sales value, 10.4% in department stores, and 10.1% in footwear, related products and other clothing accessories.

The total retail sales value of Hongkong's retail industry has been down for sixth months. The Hongkong SAR Government explained that retail sales in July were further worse, with double-digit year-on-year decline, reflecting the weak local consumer sentiment and the recent local social events, which posed significant interference to the tourism industry and consumption related activities.

Deng Shian, chief economist of Bank of East Asia, believes that the last time Hongkong's retail industry was so poor was in the 2003 SARS period. He pointed out that the data in August would be even worse because the visitors in the first half of August continued to fall, while tourists accounted for 1/3 of Hongkong's retail trade.

Deng Shian said that if the recent social violence shock incident has not subsided, it is believed that the retail situation in September is also difficult to improve, and the retail industry is likely to face pressure of layoffs.

Chen Maobo, the financial secretary of Hongkong, has revealed that the annual decline in visitor arrivals in the third week of August has been further expanded to about 40%.

Members of the Hongkong Retail Management Association reflect that business has deteriorated since June. Most retailers have fallen by more than 50% from the beginning of August to the present. "Retailers are under great pressure of cash flow in the face of high operating costs and sharp drop in revenues. If the situation continues to deteriorate, many retailers will be laid off or even closed down."

It is reported that the 10 hotels of the Cheung Shing Group sent an oral notice to their employees in late August, demanding that the staff at the hotel level should have one day unpaid leave in the rest of August, and two days' unpaid leave in September.

The Hongkong Retail Management Association also appealed to all shop owners to rent down 50% of the tenants for six months.

"We hope that violence will end as soon as possible, and people's lives and work will return to normal, and visitors to Hongkong will remain as usual." A five star front desk staff in Tsim Sha Tsui said. According to a hotel reservation software, usually the hotel's housing price is around 1500 yuan per night, and the price in the peak season is 3000 yuan a night. With the continuous violence, the current occupancy rate has dropped to around 700 yuan.