Crisis? What crisis?
Whoever worries that the gold rush in Tsim Sha Tsui will be over soon amid declining retail figures as mainland tourists shop elsewhere, can take relief at the latest leasing transactions in the core gouwu area.
China’s No. 1 gold retailer Lao Feng Xiang is set to open its first store at Shop No. 5, 53-55 Haiphong Road, an area dominated by local gold retailers including Chow Tai Fook and Luk Fook.
According to reports, Lao Feng Xiang is paying a monthly rental of HK$2 million for the 1,800 square foot store, or about HK$1,100 per square foot. The site was previously occupied by footwear retailer S Culture, which paid HK$1.2 million per month until last October.
The landlord originally asked for HK$2.6 million but the location was left vacant for four months until Lao Feng Xiang snapped it up at a 23 percent discount. At that price, it is paying much less than its rivals Chow Sang Sang (which paid HK$2.8 million for Road No. 38-40) Luk Fook (HK$2.58 million for Road No. 2-3), and Chow Tai Fok (HK$2.34 million for Road No. 53-55, ground floor B & C and 6B).
Does that mean retail spring is back after sales dropped 14.6 percent in January, the worst since the SARS outbreak in 2003?
Another new kid on the block is actually a big name, Lao Feng Xiang, which set up back in the Qing Dynasty 167 years ago. Its entry shows the vitality of TST’s gold and jewelry street.
But mind you, there is no sign the single biggest factor in the falling sales of the precious metal, namely Beijing’s anti-corruption drive, is about to ease up.
And why would mainlanders, the main customers on Haiphong Road, come to buy at Lao Feng Xiang’s TST shop, but not in any of its 2,600 outlets in China?
So we come to a more likely explanation, that the venerable gold retailer is opening a store in TST for marketing purposes.
The Shanghai-listed company started its going-out strategy in 2012 by opening a retail store on New York’s Fifth Avenue and another one in Sydney. That year, Lao Feng Xiang also set up a company in Hong Kong to sell jade and other jewelries with a registered capital of HK$30 million.
It is believed that Lao Feng Xiang, whose profit last year rose 5.6 percent to 940 million yuan (US$150 million), will continue to expand its presence in Hong Kong. Mong Kok and Causeway Bay are the most likely locations.
Haiphong Road is a symbol of how the introduction of the individual travel scheme in 2003 has transformed a small street in Hong Kong into a vibrant market of gold and jewelry. Situated next to the Kowloon Park, it used to be occupied by snack food vendors and footwear shops. Now, of its 26 shops, 11 sell gold and jewelry.
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