In an unprecedented move, 50 Hong Kong retailers with a combined 200 shops have declared a strike against 14 shopping centres in the territory, demanding rental cuts to weather the recession.
Participating retailers include confectioner Lady M, French sportswear brand Lacoste and Singapore luxury fashion retailer Club 21. Some retailers have shut their stores for 24 hours, while others have announced temporary, indefinite closures.
The affected commercial properties include Wharf Real Estate’s Harbour City, New World Development’s K11 Musea, Sun Hung Kai Properties’ New Town Plaza, IFC Mall, Henderson Land Development and Town Gas.
Deeper economic turmoil for Hong Kong
Hard on the heels of the pro-democratic protests running since June, the coronavirus has fuelled the economic turmoil as citizens stay at home, and a severely reduced appetite for leisure shopping.
Some retailers have reported sales down by 90 per cent in recent weeks, a historical low for many. Some brands have announced their withdrawal from the market, ranging from luxury brands to furniture store Pricerite.
Louis Vuitton will soon close its Times Square store, opposite Prada’s flagship on Russell Street. US chain J Crew recently announced it would close both its stores in the city.
The striking retailers are demanding the waiving of base rents, owing to the plunging footfall and a dearth of tourists. The strike had been initiated by foreign companies and medium- to large-sized merchants.
In avoidance of layoffs during the epidemic, many retailers have reduced operating hours as well as eliminated targets to alleviate financial stress on employees.
Too little, too late
Amid the struggles, a few developers and landlords have implemented relief initiatives to tenants. Henderson Land, the third-largest retail property owner in Hong Kong, has offered to cut rent by up to 60 per cent alongside mall operators MTR Corp and Sun Hung Kai.
On the other hand, small enterprises who were only able to pay half their rent, are facing legal charges by its landlords. Although the government has provided a HK$2.4 billion relief package to business, including rent subsidies, retailers say the support is too little, too late.
Meanwhile, billionaire Li Ka Shing through his foundation donated HKD$1 billion late last year to ease pressure on SMEs during the protests.