HONG KONG — Fast-fashion retailer Forever 21 is closing down its flagship in Hong Kong, according to consulting firm OC&C Strategy, yet another brand downsizing its presence in the city.
High rents and weakened mainland Chinese tourist spending in the city were behind the decision to close the prominent space in Causeway Bay, Jack Chuang, partner at OC&C said. The closure is slated for next year, leaving the brand with just a single and much smaller store in Mong Kok.
Victoria’s Secret is expected to move into the building.
Forever 21 joins brands like Ralph Lauren and Coach, which have closed stores during the downturn of the Hong Kong retail market. Others such as Harvey Nichols and Joyce have tried revamping their stores in an effort to bring customers back.
Chuang said that the large size of the Forever 21 store was initially useful for brand building when the brand first launched in Hong Kong back in 2011.
“But now that the brand is already established, the investment could be shifting from maintaining that flagship to opening smaller stores. They recently opened a new store in Mong Kok this year with around 19,000 square feet vs. 50,000 square feet in the current Causeway Bay store,” he said.
A cooling down of fast fashion could have also factored into the decision to shrink its footprint.
“Since quality is perceived to be increasingly important by consumers with regards to apparel, fast-fashion brands may start to face challenges. We have seen this with brands such as H&M and Uniqlo who have also seen decreasing profitability recently,” he added.