US clothing retailer Gap to close some HK stores after sales sink due to coronavirus-induced slowdown

04-Jul-2020 Intellasia | South China Morning Post | 6:02 AM Print This Post

US clothing and accessories retailer Gap Inc will close two out of its eight stores in Hong Kong, becoming the latest international brand in Hong Kong to succumb to the coronavirus-induced economic slowdown, the Post has learned.

An employee at the Gap store in Hysan Place said that the retailer will close the stores in the next few weeks. Gap Inc’s China media office did not reply to emails seeking comment on the planned closures.

A notice posted on the door of its soon-to-close outlet in Albion Plaza, Tsim Sha Tsui, thanked customers “for your support and love for Gap over the years. Our store will be closed soon. You may shop at other Gap stores or our online stores”.

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The Albion Plaza store will the first to close this month, followed by Hysan Place in Causeway Bay, one of the world’s most expensive retail locations.

An employee at the Gap store in Hysan Place hinted that more closures are planned. The Festival Walk outlet in Kowloon Tong and two stores in K11 Musea, in Tsim Sha Tsui, may close in August, the employee said.

The company has not given up on Hong Kong completely as it plans to keep three stores open Queen’s Road in Central, V city in Tuen Mun and Citygate mall in Tung Chung.

“Hong Kong’s retail and tourism industry is unlikely to fully recover this year,” said Thomas Lam, executive director at Knight Frank. “Brands with many shops in expensive locations will consider closing some of their stores especially when sales have nosedived.”

He said that this was most likely a strategic move as most international brands will gradually shift to online sales.

The shrinking of Gap’s operations does not bode well for the city’s landlords, as retailers big and small, fold due to an economic recession brought about by the social unrest that started in June last year and compounded by the Covid-19 pandemic.

Last week, American lingerie maker Victoria’s Secret closed its flagship store in Causeway Bay. Earlier in June, Greek jeweller Folli Follie shut all of its shops.

Last year, Italian luxury brand Prada closed its flagship store on Russell Street, one of the most exclusive shopping strips in the world where other high-end tenants, including watchmaker Rado, have shut shop.

Hong Kong retail sales have fallen for 16 straight months up to May as visits by mainland tourists evaporated. Consumer spending in May meanwhile slumped 32.8 per cent year-on-year to HK$26.8 billion (US$3.5 billion), according to provisional government figures.

In early June, Gap reported a quarterly loss of nearly $1 billion as the company was forced to close stores temporarily due to the coronavirus outbreak.

San Francisco-based Gap, which operates nearly 2,800 stores in North America, said it would prioritise closing some Gap stores and seek rent concessions for well-positioned stores that cannot support the current rent structures.

https://sg.news.yahoo.com/us-clothing-retailer-gap-close-125234413.html

 


Category: Hong Kong

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