Louis Vuitton behind this protest sign will be closing its shop in Times Square
Of all the luxury brands, looks like Louis Vuitton is cutting its losses first.
After seven months of protests in Hong Kong, the French name brand is closing one of its eight stores in the city.
Times Square's owner Wharf Reic refuses to lower rents
The world's top luxury name is pulling out of Times Square in Causeway Bay, after landlord Wharf Reic refused to lower the rent on its second-floor space. Louis Vuitton currently pays around HK$5 million (US$642,000) a month in rent.
According to the Hong Kong Tourism Board's latest figures, only 2.65 million people visited in November 2019, a decline of 56 percent from the same period last year.
Other brands like Moncler, Gucci and Salvatore Ferragamo have seen sales plunge as much as 45 percent in Hong Kong during the third quarter. LVMH reported a 25 percent decline for its Hong Kong sales in the same period.
The mainland customers who use to deluge luxury stores in Hong Kong daily are now staying at home to shop, with prices becoming more competitive in China. Previously luxury sales in Hong Kong were driven mainly by international travelers, with visitors from the mainland accounting up to 70 percent of luxury goods sales.
Hong Kong Land has offered concessions to tenants
While it's understandable Louis Vuitton wants to minimize its losses, landlord Wharf Reic is hardly being sympathetic to the situation. Meanwhile Swire Properties that owns Pacific Place in Admiralty, and Hong Kong Land, with The Landmark in Central have offered a series of measures to tenants, including rent concessions.
Is this wishful thinking on Wharf Reic's part in expecting the protests to end soon? Or is the developer completely tone deaf to what has been happening for the past seven months?
Everyone has been financially affected by the protests in the city, one way or another. Job in the hospitality industry are being cut, shops closing down as well as restaurants. Perhaps telecom and internet companies are benefiting from all the communications and online use, but most of us and the city as a whole have been affected for over half a year.
Swire Properties has also helped ease rent pressure for tenants
And the unrest is expected to continue in 2020, with Chief Executive Carrie Lam yet to find out way out of this political crisis. The economy is not expected to return to pre-protest levels within this year, maybe 2021 if some kind of political resolution is found soon.
So for Wharf Reic to refuse to lower rents is hardly helpful in keeping Hong Kong's economy going, and in the developer's best interests, wouldn't it be better to have a giant prime retail space occupied than left empty? Hard to understand Wharf Reic's strategy when everyone is else is working together to find a way to stay afloat...
A Christie's Hong Kong auction from 2015 of a Hermes Birkin bag
The luxury economy in Hong Kong is thriving more than ever. Forget Louis Vuitton and Gucci -- Hermes is where it's at.
Christie's Hong Kong just held its sale of Hermes handbags and it netted a whopping HK$45.59 million. Apparently clients from 20 countries were fiercely bidding for Kelly and Birkin bags.
This Birkin bag went for four times its estimate
Hermes bags are highly coveted because they are handmade and take months to make, let alone months or years on the waiting list for your order to be processed.
The French company is best known for using quality materials and skilled craftsmen (and women) to make its objects, but it's the Kelly and Birkin bags that everyone wants. They are the ultimate status symbol.
Even better when the bag is made from crocodile skin.
The world record for a Hermes So Black series handbag was set last night with a rare, limited edition matte black Niloticus crocodile Birkin bag from 2010. The final price was four times the low estimate at HK$1.625 million (US$208,000).
The So Black series was created by Jean Paul Gaultier when he was Hermes creative director from 2003-2010.
Have a spare H$2 million to buy this Birkin bag?
But one bag that was sold for even more was another Birkin bag made from Himalaya Niloticus crocodile matte white (though it is brown on the edges) complete with a buckle that is 18k white gold and diamond encrusted. It dates back to 2011 and its price? HK$2 million (US$252,892).
Many people don't see the point in such extreme luxury, but to see buyers willing to bid fiercely for these items show there are people with lots of money to burn, and the gap between the rich and poor is widening even more.
But don't worry if you didn't get your Hermes bag this time -- Christie's is holding two more sales next month in London and New York.
Although Hermes won't get a cent from this sale, its brand value has been elevated to even greater heights.
Lee Alexander McQueen was very close to his mother Joyce
On the plane back to Hong Kong I saw a documentary on the late British fashion designer Alexander McQueen.
Called McQueen, the documentary gathers shaky video footage the designer took himself, along with interviews with his family, friends, and assistants. It gives a fuller picture of the man who shook up the fashion world with his designs and explains how he evolved from a young man who loved drawing all the time in school, to apprenticing with top tailors in Savile Row.
There he learned the craft of making suits and his former bosses were impressed he would come into work with no attitude, and do his work very well. He later worked for other designers and learned how to come up with a theme, do research, and create a collection.
He went back to school this time, straight into the MA fashion course for Central Saint Martins College of Art and Design. He didn't have the money to pay for tuition, but his aunt did.
McQueen had creative fashion ideas in his head
His graduation collection was bought by fashion stylist Isabella Blow who became his patron and mentor, buying his creations and also introducing him to fashion circles. The documentary has footage of them at her home that had a huge estate, him playing with his dogs there and she in high heels and a military-style jacket.
Then starting out, his fashion shows were criticized for being misogynist with themes like Highland Rape and Jack the Ripper. One of his friends recounts how they got into the Givenchy show and dismissed it as "irrelevant" and then ironically he was later named creative director there.
McQueen takes a video of them pulling up to Givenchy in a chauffered car and how there were language barriers with him not speaking French, the staff working at the atelier not much English. They were terrified whenever he got his scissors out because he would just chop things up, but after they saw what he had done to resolve the problem, they understood what he was doing.
He also had lunch with the staff, which was unheard of before, and they were thrilled he respected them. McQueen later did a stint at Gucci.
McQueen was mentored by Isabella Blow
His assistant observes that when McQueen began making so much money, he got into drugs, which changed his personality. He also became more vain, doing liposuction, caving into the shallow physical expectations of the fashion industry.
But his depression hit hard, when Blow committed suicide in 2007 at 48. Some say it was because she and McQueen drifted apart, with him not appreciating her, though he denied this. There is footage of him going to the funeral in a black jacket and red tartan looking distressed.
However creatively he got better and better, exploring themes of death and beauty. Models and his friends say McQueen was always true to himself and didn't care what others thought of what he was doing.
McQueen was very close to his mother, the youngest of six children. She gives a few interviews about him, saying how he was very talented and he was a good boy. But when she died in February 2010, McQueen was devastated.
He spoke to his older sister on the phone about their mother's funeral, but then the day of the funeral she found out McQueen had killed himself by hanging. A former assistant ominously recounts how McQueen had talked about suicide, and how he would probably leave his flat in a body bag. His sister believes he could not deal with his mother not being around anymore.
A model's dress is being painted by two robots
That's when the documentary ends, giving a post script about how his posthumous show "Savage Beauty" at the Metropolitan Museum of Art was the most popular ever in the New York museum. That's when I came into contact with his work and was in awe of his creativity. Everything was possible and he was not afraid to try.
The interviews with the friends and family show how much he impacted them, from berating an assistant for leaving him and then coming back, to his nephew so proud of McQueen and what he did, to his sister describing a skirt he made for her that fit like a glove but was almost impossible to walk in.
There's a lot of people out shopping in Causeway Bay for Christmas
This evening after work I headed out to do some Christmas shopping in Causeway Bay.
I prefer shopping in the evenings because in general there are fewer people in the stores, though with Christmas less than two weeks away there were quite a lot of people with the same idea.
When I headed to Sogo department store there were fewer and fewer people the higher up the floors I went, which was a good thing. In the kids' section there were discounts, but for shops like Ferrari, Kenzo, Gucci and Paul Smith -- since when did he do kids' clothes, the prices were over HK$1,000.
Cute Paul Smith clothes for kids that I want to wear!
And Gucci even had those loafers lined with fake fur... really? At that age?
I went to one boutique for adult sportswear and was interested in buying some items when I looked at the time and it was 10.10pm.
I apologized to the saleswoman for keeping her late.
"Oh don't worry about it. We're open until 11.30pm today," she replied, explaining if Sogo wants to be open until 11.30pm, all the shops inside must stay open too.
I was shocked. "Who actually buys things at 11.30pm?" I asked incredulously.
Check out these Gucci loafers with fake fur
She replied she didn't know, but perhaps she wanted to prevent herself from complaining.
However, she did let it slip that from December 22-24 they would be open until midnight.
"Midnight!" I gasped. "Are there really people buying at that time?"
Again she and her colleague held back from giving their opinion on the matter. They had a job to do, and it was for however long they were expected to work.
So when you go shopping this holiday season, think of all the sales people who have to stand around until the wee hours to serve you. They deserve a break too.
For mainlanders this is the must-have winter jacket these days
Hermes, Chanel, Gucci and now Canada Goose.
The Canadian down jackets are a must-have for mainland Chinese shoppers, and while they have been flying off the racks in luxury department store Holt Renfrew, the US$900 jackets will soon be available in Hong Kong.
This past Christmas when I was in Vancouver, mainlanders descended on racks of Canada Goose jackets at Holt Renfrew, trying them on and snapping them up. I've heard stories of them calling up their friends in China and asking them what size and colour they want, and buying 10 to 12 at a time.
The Chinese are snapping up the jacket in Canada stores
How do they even pack them all into their suitcases?
The latest news is that a sign in Chinese in a Toronto store states shoppers can only buy two jackets per day, probably due to complaints from local residents unable to get their hands on the prized jackets.
Dani Reiss, president and chief executive of Canada Goose knows he's onto a hot product and is eager to expand to Asia.
"A lot of people from the mainland often go to Hong Kong to buy products. That's one of the reasons why it makes sense for us to have a store in Hong Kong," Reiss said. "Even though it's a warm-weather climate, [where the temperature] almost never goes under zero."
Dani Reiss plans to open stores in Hong Kong and Beijing
The Toronto-based company will have two flagship stores, one in Hong Kong, the other in Beijing, and an e-commerce presence on Alibaba's Tmall, and set up an office in Shanghai.
The Hong Kong store will be in IFC mall and is expected to open in the fall. An interesting fact is Reiss is the third generation to run the company that was started by his Polish immigrant grandfather in 1957.
There should be no problem in selling Canada Goose in Hong Kong -- it's subtle in its look, very functional and it's a status symbol to wear. What more do you want in this day and age when Chinese luxury spending has to be a bit more discreet these days?
Please cut those white threads off the back of your coat!
Most Hong Kong people like to pride themselves on being fashionable.
But sometimes they are just slightly off the mark.
These days I see a lot of young people wearing coats and don't realize they need to cut off the "x" seam at the back to allow the vent to open.
Yesterday I walked behind this young man for about 15 minutes in Fotan in the New Territories and wanted to tap him on the shoulder and say, "You need to cut off that white thread at the back of your coat!"
I've seen young women wearing coats and not cutting off the "x" threads either. The sales people should really let them know they should cut it off when they get home. It's a sign that the coat is new, but if you keep wearing it like that, then it just shows your ignorance unfortunately!
Furry mules... are they really necessary?
Another fashion faux pas are fashion slaves. They will buy the latest "it" pieces without thinking about practicality or if the item suits them.
Take these latest Gucci mules called Princetown leather slippers. They are designer street dusters because the fur is touching the ground and how practical is it wearing these shoes? How can you even walk in them?
I spotted this woman wearing them in Kennedy Town -- not exactly The Landmark.
Apparently these shoes cost US$995 but they have this air of aristocracy that seems so out of place in 2017. Hardly seems practical or necessary...
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?
Paper handbags and shoes with the Gucci logo in a Hong Kong shop
Luxury brands are aggressively wooing the Chinese market, lowering prices on the mainland, and having Putonghua-speaking staff in boutiques around the world.
But earlier this week Gucci hit out at companies in Hong Kong selling fakes of the Italian uber cool brand -- for the dead.
Let me explain: Those who are Buddhists believe in the afterlife, and that loved ones on earth must send paper offerings to them in the next world by burning them.
Burning "money" to send to the dead in the afterlife
Traditional items would be paper clothes and money, known as hell notes, gold papers that are folded to look like gold ingots and other combustible items of significance.
In recent decades, paper offerings have evolved to include cars (with chauffeurs), homes, watches and mobile phones -- all made of paper. And in the last few years, the name brands of these offerings were more prevalent, like Mercedes-Benz, Rolex, iPhone, and Gucci, and Louis Vuitton.
So you can imagine six small shops in Hong Kong that sell these items were shocked to receive angry letters from Gucci, demanding they stop infringing on the Italian brand's trademark. The items were only going to be burned up anyway. And what if the deceased was a loyal Gucci customer?
After word got out in the media mocking the luxury brand for going after these shops selling paper offerings, Gucci made an about-face on Friday and apologized for sending out the letters.
The fashion house acknowledged the stores had no intention of infringing on intellectual property rights, and promised not to pursue any legal action.
Even paper cars complete with chauffeurs can be offerings
"We regret any misunderstandings that may have been caused and sincerely apologize to anyone we may have offended," the company said in a statement, explaining that the letters were sent as part of efforts to protect its global trademark.
If the company was smart, it would have asked its local Hong Kong staff about these items and their cultural significance, and then this big PR faux-pas would never have happened.
But it did, and thankfully Gucci has gracefully bowed out.
This incident illustrates how the Italian brand hasn't really done its homework in terms of getting to know one of its important markets.
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...
