Date
22 July 2019
Calzedonia has renewed its lease on a 400-square-foot shop in Causeway Bay. Photo: Wikimedia Commons
Calzedonia has renewed its lease on a 400-square-foot shop in Causeway Bay. Photo: Wikimedia Commons

Calzedonia pays big to stay in Causeway Bay

How many socks and leggings does Calzedonia have to sell in Causeway Bay to make enough money just to pay its landlord?

The Italian fashion brand has renewed its lease on a 400-square-foot shop at 60A Russell Street, a month before its contract was to expire, Apple Daily reports.

The new contract represents a 15 percent increase from the old lease.

Calzedonia will pay HK$9 million for a one-year lease, or HK$750,000 a month. That translates to about HK$22,500 per square foot.

That’s not unusual for a shop on Russell Street, which is the world’s most expensive retail space.

Last year, Russell Street regained the crown as the priciest commercial area by rental value after five years, according to property agency Cushman & Wakefield.

In 2018, average rent on the snooty shopping block was US$2,671 (HK$20,953) per square foot. Although down 1.5 percent, the rate was high enough to trump New York’s Upper 5th Avenue, where rents fell 25 percent last year as vacancies rose.

Calzelona’s decision to agree to a rent hike indicates a trending up at Russell Street, which is a must shopping area for mainland tourists obsessed with luxury brands.

Thanks to the inauguration of the Hong Kong-Zhuhai-Macao bridge and the high-speed Express Rail Link, the city’s enhanced connectivity is expected to lure more mainland tourists.

That’s why Hong Kong might reverse the falling trend in commercial rents since arrivals across the border peaked in 2015 as a growing number of tourists from across the border felt they were not welcome here and went to other destinations such as Japan and Europe instead.

That’s why, too, Calzedonia will have to sell lots and lots of socks, leggings, and lingerie to be able to pay the rent and cope with the competition from the likes of Victoria’s Secret.

The Italian retailer has 16 outlets in Hong Kong, including those for its other brands such as Intimissimi and Falconeri.

Well, in order to be a luxury brand, one must be able to project luxury.

– Contact us at [email protected]

CG

EJ Insight writer

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