Burberry Shutters Hong Kong Flagship on Canton Road, Citing Very Challenging Trading Environment
LONDON — Burberry has closed its flagship store in Hong Kong’s Canton Road, one of the world’s most expensive shopping streets, the brand confirmed Friday.
This is the second major store that the British brand shuttered since the COVID-19 pandemic. The brand first closed its flagship in Causeway Bay last year. Burberry reportedly paid 8.8 million Hong Kong dollars, or $1.12 million, a month for the location, overlooking Lane Crawford on Russell Street.
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The brand’s 5,500-square-foot store on Canton Road, Tsim Sha Tsui, was opened in 2011. At the time, the area where the shopping mall Harbor City is located was one of the most popular shopping destinations for mainland China tourists after cross-border travel was opened to the majority of Chinese citizens.
Local media estimated that Burberry used to pay around 6.5 million Hong Kong dollars, or $828,200, a month for the prime location, sitting between Longchamp and local jeweler Chow Tai Fook.
Since the introduction of broader controls between mainland China and Hong Kong in early 2020, in addition to waves of social unrest before that, luxury retail in Hong Kong has taken a big hit.
The brand admitted during its recent earnings call that trading in Hong Kong is “very challenging” because there are few Chinese tourists in the region.
But the brand is expecting a mega China rebound as the nation began to loosen COVID-19-related restrictions. Burberry said it plans to invest further in China and position the brand for a strong sales rebound when the lockdowns lift.
For instance, the brand opened a major flagship in partnership with China’s tech giant Tencent in Hong Kong’s neighboring city Shenzhen two years ago. The store inside Shenzhen Bay MixC fuses physical and digital elements and asks shoppers to press their WeChat accounts into action as they game their way around the store, making virtual and real-life discoveries.
“We’re anticipating a rebound, and we’re prepared for it. We have bought inventory. We are investing ahead of the curve,” said Julie Brown, Burberry’s chief operating and chief financial officer, adding that past experience has taught Burberry that when China recovers, it does so in a major way.
The trenchcoat-maker still operates a total of 10 points of sales in Hong Kong, including childrenswear and outlets stores in key malls like Sogo and Lee Gardens in Causeway Bay; Elements, Ocean Center and K11 Musea in Tsim Sha Tsui, and Alexandra House in Central.
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