Hong Kong office-apparel retailer G2000 is facing struggles across its portfolio with at least one store – in the territory’s high-profile Harbour City shopping centre – closed over unpaid rent.
In the same centre, a store occupied by G2000-owned high-end women’s clothing label Anagram has been temporarily shuttered.
G2000 is another professional workwear brand, like US icon Brooks Brothers, that has seen a decline in sales of office wear since the pandemic drove many employees to work from home.
A sign posted on the shuttered Harbour City storefront pinpoints blame for the closure to unreasonable landlord demands, in addition to the impact of social unrest and the Covid-19 pandemic. The company said its sales had slumped by 50-60 per cent during the course of the two events.
“We regret to notify you that our shop is closed temporarily as the court bailiff has now seized our goods on behalf of the landlord. Regrettably, the landlord insisted on FULL rent payments throughout the latter half of last year when sales plummeted through the floor, and for the Covid months this year our sales cannot even cover their rent,” read the notice.
“As a matter of principle, we consider it unconscionable for the landlord to ask for more and unfair to other landlords for us to pay whoever insists. We value your patronage, welcome you at our other shops and apologise for the inconvenience caused whilst we uphold our principle of being fair to all landlords alike.”
The not-so-benevolent landlord
Hong Kong retail sales have been declined for 17 consecutive months, with the most recent data, for June, down 24.8 per cent to US$3.42 billion.
Currently more than a third of G2000’s 39 branches across Hong Kong and Macau are seeking rent relief, including shops at Central, Sun Hin Lee Building, China Hong Kong City, Miramar Plaza, Kowloon Tong Festival Walk, Mong Kok and Yuen Long. Other branches have received varying degrees of rent relief, but the Harbour City branch had only been able to pay half of its rent since February, with reportedly no leniency granted by Wharf Real Estate-owned Harbour City.
In its recently announced interim results, Wharf Real Estate said retail sales at Harbour City had fallen 30 per cent to $402.9 million.
Wharf said it had provided more than $129 million in cash relief for its tenants during the first half of the year. It also renegotiated contracts in exchange for reduced rents subject to confidentiality agreements and the extension of leases for 18 months, a move that triggered a collective strike by 30 stores.
Many retail brands reliant on tourists within the Canton Road-Tsim Tsa Tsui area have closed their stores. Luxury retailer Coach abandoned its 4000sqm flagship in May; Italian fashion brand Valentino moved out of Canton Road in April; American casual clothing brand Gap closed after its lease ran out last September (replaced by Hong Kong’s largest Lululemon store), and it also withdrew from Harbour City, moving to the ground floor of Aibin Commercial Building.
G2000 recently teamed up with local marketplace platform HKTVmall to sell shirts for HKD$99 (originally priced at HKD$299) in the hope of clearing its stock and retaliating against local fast-fashion and online brands.
The group has more than 700 retail stores located in China, Hong Kong, Macau, Malaysia, Singapore, Taiwan, Vietnam and other markets. Its main brands are G2000 Man, G2000 Woman, G2000 Studio, Blaack and At Twenty.
