HONG KONG — Coach is pulling out of its Hong Kong flagship lease two years early, the latest high-profile victim of the slowdown as Mainland Chinese tourist flows to the city dwindle.
The store’s last trading day will be August 31, Coach told WWD. The lease of the four-story shop located in prime retail space on Queens Road Central was meant to expire in October 2017.
Coach is among other luxury retailers that have revealed plans to negotiate lower rents in the city or close stores. These include Burberry, Tag Heuer, Kering and Chow Tai Fook.
The Coach flagship first opened in 2008 to much fanfare, with the brand inviting singer John Mayer to perform a special concert. It extended the lease in 2012 for five years at a reported monthly cost of 7.2 million Hong Kong dollars, or $929,401 a month.
“Coach remains fully committed to the development of the Hong Kong market, as part of our growth strategy for the Greater China region,” the company said in a statement. “As part of our brand transformation, we are currently investing in progressively renovating and elevating our stores in Hong Kong and other locations, to deliver an exceptional shopping experience to customers. For instance, our flagship store at Canton Road has gone through refurbishment and re-opened on August 17 as a modern luxury concept store.”
After the closure, Coach will operate 21 stores in Hong Kong.
The brand’s chief executive officer Victor Luis told investors in a fourth quarter earnings call on August 4 that the company was feeling the pressure of the China slowdown.
“In China, consistent with what we and other brands have reported throughout the year, we’re seeing significant volatility in results. Hong Kong and Macau continue to be impacted by the dramatic slowdown in inbound tourist traffic, notably from the Mainland [China],” Luis said.
The ceo added that Coach was targeting sales growth for the year in greater China of about 5 percent, or around $625 million.