In malls across the city, retailers shut their fashion outlets, restaurants and cafes on Tuesday in an unprecedented strike to demand rental cuts, as plunging foot traffic caused by months of anti-government protests and a coronavirus outbreak threatens to decimate the industry.
Fifty retailers, including Lady M cake shops, French sportswear brand Lacoste, and fashion brand Club 21 are among nearly 200 shops that have declared a “no business” day across 14 shopping centres in Hong Kong. Some of the shops said they would be shut for 24 hours, while others announced temporary closures without stating a time limit.
“The last seven months of losses have become unbearable for many of us,” said Ashley Micklewright, president and chief executive at Bluebell Group, a distributor of luxury brands including Moschino, Davidoff and Anya Hindmarch. “The impact on the business and traffic is far worse than anything we have ever experienced.”
Hong Kong’s retailers, hotels and restaurateurs are taking the brunt of the city’s economic woes, with some stores losing as much as 90 per cent in sales compared with last year, as average daily arrivals plunged to 3,000 in February from 200,000 in the first half of 2019. Some of them have joined forces to press their landlords into cutting their rent.
“The last thing we want to do is to shut down something that took a few decades and three generations to build, let alone lay off our employees,” said Micklewright, whose group earned US$50 million in sales in 2018 through 22 outlets in 19 shopping centres in the city.
Tuesday’s strike affected 14 shopping centres all over Hong Kong, including Harbour City and Musea in Tsim Sha Tsui, New Town Plaza in Sha Tin, and the IFC Mall in Central.
Some commercial real estate landlords have already announced rental relief. But for most companies, it’s not enough.
“Even if you give a 15 per cent deduction, in terms of amount it's peanuts,” said Micklewright: the average monthly commercial lease price in Causeway Bay, at HK$500 per square foot, stands among the highest in the world. “It’s not going far enough.”