Emperor Watch and Jewellery has become the second publicly listed Hong Kong retailer within a week to call for retail rent reductions.
Chairwoman Cindy Yeung Lork-sze said in an interview with the South China Morning Post that the company expected to see a 10 per cent to 20 per cent cut in rents of shops next year given the territory’s slowing retail sales and decline in mainland shoppers.
“We won’t have any rent cuts this year but it is expected to begin next year during rental renewals,” she said, suggesting a 10-20 per cent decline was in line with the market trend.
Last week, Chow Tai Fook MD Kent Wong said his company has already been granted reductions of between 10 per cent and 20 per cent in renewal negotiations this year, but he did not reveal the number of leases involved.
He told Bloomberg: “We are demand driven; we expect we can have a 20 per cent rental reduction.”
This week, Yeung said Emperor would close up to three of its 24 shops in Hong Kong shops to consolidate its store network as a response to the slowing luxury sales.
Retail sales fell 2.3 per cent in the first quarter to 2015, largely attributed to a change in the demographic of Mainland shoppers. More cashed up, affluent consumers are spurning Hong Kong in favour of destinations like Japan and Korea, some spooked by last year’s Occupy Central protests.