Monday, 21 November 2016

The A&F Party is Over

The A&F boys whipped up a lot of attention in the city in 2011
We're actually surprised Abercrombie & Fitch lasted this long in Hong Kong.

After a splashy opening that included topless men in red shorts riding in an open-deck bus and greeting customers at the Pedder Street store in 2011, the casual American wear brand will close its doors early next year.

The male models drew lots of customers into the store
It is breaking its lease that was supposed to expire in 2019, probably to the relief of the company's headquarters, which was paying HK$7 million a month for the 25,600 square foot store, double that of the previous tenant, Shanghai Tang.

"The company exercised a lease kick-out option for its A&F flagship store in Hong Kong," the retailer said on Friday. It claimed the move was "part of the company's ongoing strategic review" and "was expected to drive economic benefit over time".

Which probably means we had to cut our losses and review our strategy.

After the store vacates the Pedder Street location, Abercrombie & Fitch will not have a presence in Hong Kong anymore, though it plans to add five more stores to the mainland by the end of January.

How much merchandise do you have to sell to make rent?
Anyone could have told the company paying HK$7 million a month was too much, and how many jeans and T-shirts would it have to sell to make rent? Someone wasn't doing the calculations.

And besides there are fewer mainlanders shopping in Hong Kong, and the days of someone buying 10 Gucci bags at once are long gone.

They are lucky to get 10 customers buying one bag each these days.

So who is going to take over this prime shopping space? And will the rent be lowered too?

We're all eager to find out.

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