Retail in Hong Kong faces a crisis now mainland shoppers vote with their feet. But Italian luxury lingerie brand La Perla opens a new flagship store in the embattled city. WSJ wealth editor Wei Gu tells in the Wall Street Journal what is happening.
This is La Perla’s fourth store in Hong Kong. John Hooks, CEO of the Italian company, said it has plans to open another three to five stores in Greater China in the next year or so. The now private-equity-owned brand has plans to bring its total store network from 215 to 230 globally in a year. The company has seen 30% annual sales growth in its stores, with growth in China a little faster at 35% to 40%.
Mr. Hooks said China’s slowdown has affected demand, but the impact has not been as acute as it has been on other luxury brands. Many brands have taken a hit due to Beijing’s anti-corruption campaign and the clampdown on lavish gift-giving; some luxury goods companies had also expanded too quickly in China, becoming overexposed.
Coach closed its flagship store in Central in August, and other brands like Prada and Burberry have seen a decline in sales, which they blame on weak China demand.
“You plan these things (store openings) years ago; I can’t say we predicted the economic situation now,” said Mr. Hooks. “But lingerie is not to be ostentatious, not to show off, so those factors aren’t really at play with us.”
Some even argue that as people become more careful about showing off luxury items in public, they are more willing to enjoy discreet luxury pleasure.
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