The North Face opens largest Asia store with 3,800 sq ft at K11, betting on Hong Kong's retail recovery

Topshop, Victoria’s Secret, Greater Bay Area

The North Face, the US-based brand known for its outdoor apparel and mountaineering gear and equipment, is set to open its largest store in Asia-Pacific in what could be the first tangible sign that Hong Kong’s battered retail property segment is on the mend.

Opening on December 2, the store covering 3,800 square feet in K11 Art mall in the Tsim Sha Tsui shopping district comes as retailers eagerly look forward to welcoming Chinese tourists who could be back in large numbers after the border with the mainland reopens early next month.

“[The K11 store] is the largest store in Asia-Pacific and the broadest representation of the line we have anywhere, so we’re still very focused on bricks and mortar,” said Kevin Bailey, executive vice-president and group president for Asia-Pacific and emerging brands at VF Corporation, whose brands also include Vans, Dickies, Timberland, Supreme and Kipling. VF has 3,800 outlets in Asia.

The store’s opening is a spot of rare good news for Hong Kong’s retail segment, which has seen a number of luxury and mid-market brands close their stores in the city as visitors from mainland China started to dwindle in 2019, hurting their sales.

Topshop, Victoria’s Secret, Greater Bay Area

Kevin Bailey, executive vice-president and group president for Asia-Pacific and emerging brands at VF Corporation. Photo: Handout

Last week, British luxury fashion house Burberry said it would shut its flagship store on Russell Street in Causeway Bay when its current 10-year lease expires in early 2022. It will be the third major global brand to close its flagship store on what was once the world’s most expensive shopping strip.

Prada closed its 15,000 sq ft outlet in June 2020, followed by lingerie maker La Perla three months later in September. Topshop, Gap and Victoria’s Secret also closed their operations in the city after they were hit by the anti-government protests in 2019 and later by the Covid-19 pandemic.

While Hong Kong retail sales have been improving in recent months, partly because of the government’s consumption voucher scheme, the reopening of the border between the city and mainland China is likely to further improve sales.

In 2020, total retail sales in the city declined by about a quarter as tourist arrivals fell 94 per cent. Retail sales in September rose 7.3 per cent year on year to HK$28 billion, helped by the HK$36 billion (US$4.6 billion) digital voucher scheme. In the first nine months of the year, sales have risen 8 per cent from the same period last year.

Topshop, Victoria’s Secret, Greater Bay Area

Pedestrians walk past a Burberry store on Russell Street, Hong Kong, which the British luxury brand plans to close next year. Photo: Sun Yeung

Recent investment trends in Hong Kong have hinted at improving fortunes for the sector. So far this year, the volume and value of deals involving retail assets have grown 12.5 per cent and 52 per cent, respectively, according to Colliers.

In August, veteran investor Chang Miguel Yen-shee bought a shop on Pedder Street in Central for HK$710 million, while stockbroker Peter Yip Mow Lum paid HK$525 million for a Causeway Bay retail property, according to Colliers.

“With an improving economy and a rebound in sales, retail assets have become increasingly sought-after by investors,” said Rosanna Tang, head of research for Hong Kong and Greater Bay Area at Colliers. “We believe the next six months will be a good time for investors to bottom-fish” when prices are still negotiable, she added.

Lawrence Wan, senior director, advisory and transaction services for retail at CBRE Hong Kong, said that physical stores still serve retailers for more experiential and brand-building purposes.

Categories such as food and drinks, spa, salons and learning centres are also likely to take up more retail space in the city, said Oliver Tong, head of retail at JLL in Hong Kong.

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