Hong Kong’s sizeable British expat community is getting excited about next year’s opening of Topshop in the city’s central business district.
But they are not the only reason why Sir Philip Green has decided to open the British brand’s first permanent outlet in greater China.
The city is a favourite holiday destination for mainland China’s growing middle class, who flock to the tax-free special administrative region to shop, and also an international financial centre passed through by many visitors already familiar with the brand. Locals also have among the highest spending power in the region.
A growing list of international brands are paying the world’s highest rent to make the city their showcase. Topshop’s “fast fashion” rivals H&M and Zara have been there for years, and they also have numerous outlets in mainland China.
The risks for retailers are also getting higher. Shop rent in the city’s most expensive areas rose about 30 per cent this year while the growth in mainland China arrivals is slowing.
But billionaire entrepreneur Sir Philip reminded everyone what a canny operator he was when a US private equity group last week agreed to buy a 25 per cent stake in Topshop and Topman in a deal which valued the chain at £2bn.
Similarly, the Hong Kong partnership with local high-end retailer Lane Crawford Joyce Group looks like a good deal. LCJG will pay for the 12,000 square-foot space in the city’s Central district, will provide the staff and logistics support, and provide local marketing expertise. Topshop’s main role is coming up with the merchandise.
“The group works with 150 international brands in Hong Kong and mainland China and we know that the contemporary fashion segment is growing the fastest. We are looking at 20 per cent year-on-year same-store growth,” said Andrew Keith, president of LCJG.
Sir Philip brushed aside any suggestion that the new venture might have missed the period of highest growth in Chinese consumer spending. “Other retailers in our space have many, many stores, like four in the same street even, which I have never figured out. We are based on different model. There is no fixed plans to open a certain number of stores in mainland China and Hong Kong, though it’s open for discussion,” he said.
“We are not a brand to pay crazy prices to enter a market. It’s taken time to find the right location and the right partner in Hong Kong,” he added.