New rent: 1.1 million euro… per month
H&M entered the 2,790 square metre store in 2007, but as local
rents are going through the roof (rising 20% last year alone!), the
store has become unprofitable. The retail market in Hong Kong is under
pressure, as customers from mainland China are starting to feel the
crisis and are less likely to embark on shopping trips to the former
British crown colony.
The Swedes are not the first chain to leave the expensive Central
district and move elsewhere in Hong Kong: analysts have spotted a real
“trend toward decentralisation”. Apart from its flagship store, H&M
already had eleven other stores in Hong Kong.
H&M’s major competitor, Zara, apparently feels the crisis
somewhat less: the Spanish chain is the new tenant of the building and
have accepted to pay a rent of 1.1 million euro per month – almost twice
the rent the Swedes pay now.