Picture of the Day: Regina Ip's Burberry Boycott

Pro-Beijing lawmaker Ip seems to look longingly at her scarves

 

The uproar over cotton from Xinjiang has dragged fashion labels into the fray. Fast fashion brand H&M immediately felt the wrath of China when it was completely wiped out of the Chinese internet sphere when it declared it would not use Xinjiang cotton.

Other companies are sending out mixed messages with Hugo Boss saying on its website it did not use cotton from China's northwestern province, but its Chinese office said it did.

Then celebrities were caught up in declaring their allegiances too, with Cantopop singer Eason Chan Yik-shun cutting his ties with Adidas, while others supported Xinjiang cotton, such as Joey Yung, singer Pakho Chau Pak-ho, actor Jordan Chan Siu-chun, and actress "Angelababy" Angel Yeung Wing.

Politicians got into the act of showing off their patriotism, with Regina Ip Lau Suk-yee taking the lead.

On Twitter she posted a picture of herself sitting on a couch and seemly looks longingly at her three Burberry scarves. The British fashion brand said it would not use Xinjiang cotton.

Ip's post said Burberry is one of her favourite brands: "I will stop buying or using Burberry products until Burberry has retracted or apologized for its unfounded allegations against Xinjiang."

Is that all Ip has in her wardrobe from Burberry? Three scarves?

Hardly seems like a boycott... 

Flashing the Cash in Macau

Beautiful blue skies this afternoon with a view of Galaxy Macau

Usually when I'm in Macau for work, I'm rushing to where I want to get to, and then rushing back to the ferry terminal to get back to Hong Kong as soon as possible.

This time I had an hour to kill before dinner and wandered around Galaxy's shopping mall area. It's very glitzy, much like Elements in West Kowloon, with practically every top luxury brand you can think of having a store there.

Everywhere you look there are luxury brands in the mall

However, unlike Harbour City and IFC mall in Hong Kong, they are not crawling with lots of mainland shoppers. Some stores were completely empty and desperate for anyone to at least walk in, others might have one or two people.

There are two types of mainland consumers these days -- the sophisticated ones who already have the brand name bags and designer clothes who act nonchalant, while the country bumpkins like to flash the cash, but don't have much style.

The latter ones I saw at Burberry, a group of women ranging from 20s to 50s who sat around couches in one room of the store and chatted loudly as they waited for a saleswoman to bring a bag out from the supply room.

One even took her foot that was wearing a dirty nylon sock out of her shoe and rested it on the coffee table. Classy. They spoke in a dialect I couldn't understand but it sounded like they were shouting at each other, but probably having an inane conversation.

Burberry is one of the stores that had some customers

Meanwhile the sales staff wore earpieces and would constantly report on customers' whereabouts -- "the young woman with the black bag is coming up stairs" or "they are still sitting there" in Cantonese.

The gaggle of women got so frustrating for one salesgirl to deal with that she vented her stress by stomping on the store's internal staircase as she walked up the stairs.

Burberry items may be cheaper than Louis Vuitton, but still considered luxury at over HK$10,000 for a handbag.

There's no choice but to try your best to please the rich -- no matter who they are -- because they're the ones paying your salary.

Retailers Change Their Tune

Did hot men result in hotter sales for Abercrombie & Fitch in Hong Kong?

A few years ago luxury brands muscled their way into prime retail locations in Hong Kong, which had the domino effect of unsympathetically pushing out mom-and-pop stores that had been there for decades.

This kind of gentrification was not welcomed by Hong Kong people -- these boutiques selling expensive fashion, jewellery and watches were catered towards mainland tourists, not the local population.

It got to the point where there were regular reports in the paper about this noodle shop closing, or that bakery shuttering because of exorbitant rents, and residents rushed to these places for their last bite because it reminded them of their childhood.

I also joked at the time that because all these food shops were closing that we wouldn't have anything left to eat.

Burberry's flagship store in Pacific Place

Abercrombie & Fitch created a stir when it kicked out Shanghai Tang from Pedder Building in Central, and even worse, was willing to pay double the rent at HK$7 million a month.

After the hoopla of having topless men with washboard stomachs (of course) doing publicity stunts around town, did that help sell millions of dollars worth of casual clothes per week?

Then there was Burberry that took over the space previously occupied by Lane Crawford in Pacific Place in Admiralty, that caused a chain reaction -- Lane Crawford then moved across the street to Queensway, uprooting a number of small shops that had occupied that area.

But now some of these brands are having their comeuppance, as mainland shoppers are not keen to buy big ticket items in Hong Kong, and instead are looking further afield to outlet stores -- in Europe and Japan where the euro and yen are weak.

Swiss watchmaker TAG Heuer is closing its store on the popular Russell Street in Causeway Bay, while luxury group Kering (formerly PPR) founded by Francois Pinault, will be asking for lower rents for its brands like Gucci, Saint Laurent Paris, Boucheron, Bottega Veneta, Stella McCartney and Qeelin.

Kering not only wants to get rent reductions in Hong Kong, but also Macau, and if these requests aren't met, some shops may have to close in the region, according to the company's chief financial officer Jean-Marc Duplaix.

IFC mall in Central is full of luxury brand stores

Following its big gamble of setting up many shop spaces in Hong Kong, Burberry Group is looking for a cut in rent, saying Hong Kong is "a challenging luxury market", while Coach says its weak sales were due to "lower tourist trends from the mainland".

On the other side, big landlords like Hongkong Land says it has received requests to decrease rent, but has refused to, while Cheung Kong Property Holdings that owns 1811 Heritage mall in Tsim Sha Tsui has frozen the rent for three years when leases were up recently.

However luxury mall owners like Sun Hung Kai at IFC mall and Hysan Development at Hysan Place and Lee Gardens have claimed they didn't receive any requests to have cuts in rent.

Chasing the mainland tourist dollar has been a short-sighted strategy all along. While the sheer numbers of visitors across the border cannot be ignored, Hong Kong entrepreneurs should not completely shut out local clientele.

Either way perhaps landlords will finally realize that their greediness was not sustainable long term...

Across the Board

Queues like these in front of Chanel will soon be gone in Hong Kong

French fashion brand Chanel has made headlines for announcing it will standardize its prices around the world as a way to develop its share of the Chinese market.

Some other names are following suit, such as Burberry, Cartier and Patek Philippe, but some analysts warn the strategy could backfire by devaluing Chanel's image and making it appear less exclusive.

The French fashion house will start "harmonizing" its prices, beginning with its three iconic handbag models, the 2.55, 11.12, and the Boy bag.

The drop in the euro led to prices falling for the bags in Asia resulting in a surge in spending on the mainland, with the Boy bag falling from 32,700 yuan (HK$41,400), to 26,000 yuan, while in Europe it rose 3,720 euros (HK$32,200) from 3,100 euros.

The 2.55 bag, or February 1955, the date it was created

"We made a very important decision, to treat our customers the same way everywhere in the world. It was a big decision," said Bruno Pavlosky, Chanel's president of fashion.

"The reason we decided to do the price standardization was to prepare ourselves for the next 20 years," he said. "the brand is quite strong; the year before we had double-digit growth in almost every market, so we can afford to make such a decision."

He adds the harmonizing of prices allows Chanel to treat customers the same everywhere, which was not the case before.

This announcement will be another blow for Hong Kong's luxury retail industry, as fashion brands are more expensive on the mainland thanks to the strong yuan and luxury tax, and as a result, many mainland Chinese come to the city to buy expensive items for cheaper. They would also venture further afield to Europe, but now with prices soon to be standardized, they won't have to travel far.

This is Chanel's way of undercutting parallel traders who would entice Chinese students with free trips to Paris so they could buy handbags (one per person), and resell them back home at an inflated price.

Pavlovsky also says it is a concerted effort to end dodgy websites supposedly selling Chanel bags, making it difficult for consumers to tell if the products were "genuine, second hand or counterfeit".

Another interesting fact is that there are only 11 Chanel stores in China, and nine in Hong Kong alone.

With the price standardization starting to take effect, Hong Kong will still have a bit of cache for being a fashion-forward city for mainlanders to see the latest trends and take advantage of the wide selection of goods. But the lineups in front of luxury stores will probably disappear very soon.

Does the Hong Kong government have a plan B for the retail and tourism sectors?

Brazen Theft

A coat like this was stolen on Wednesday

On Wednesday evening a daring shoplifter walked out of the Burberry store in Tsim Sha Tsui with an almost HK$1 million alligator skin coat.

Security cameras show a Chinese man in his 30s or 40s taking the jacket off the mannequin and walking out out of the three-story store within a minute.

Shop assistants were apparently busy with other customers that they didn't realize the very expensive coat was missing until they were doing stock taking at closing time.

The report is gobsmacking on two counts. First is that according to a police source, some designer brands do not like putting security tags on their merchandise.

The Burberry store on Canton Road in  Tsim Sha Tsui

"They think it will ruin their design and damage their brand name," the source said. "They rely on surveillance cameras and security personnel."

And in Tsim Sha Tsui, the source added, luxury stores report on average two to three thefts per month. "They are opportunists and usually act alone. They target designer goods that do not have security tags."

Burberry in Hong Kong is not commenting on the matter, saying it is under investigation, but one has to wonder... losing a HK$995,000 ($128,276) coat surely should be something closely watched?

But secondly -- who needs an alligator skin coat that is worth the amount of two years' rent for a place around HK$40,000 a month?

The theft of the expensive coat illustrates there are shoppers out there who can easily afford an item like this, and those who obviously would not because they don't have decent living conditions or enough food to eat.

A coat like that would easily be spotted when worn in Hong Kong so it must have already been taken out of the city and sold in the mainland where tastes are, shall we say, more extravagant?

Or is this a new trend where shoplifters procure items for people for a fraction of the price tag?

In any event, it's quite amazing a shop would have an almost HK$1 million coat for sale, and another for a shoplifter to brazenly walk out with the coat without anyone watching.

Hong Kong never ceases to amaze.