Harvey Nichols to close Landmark store due to weak retail spending

British luxury fashion retailer Harvey Nichols is set to vacate its Landmark store in Hong Kong at the end of the financial year in March, citing weaker-than-expected retail spending from locals and Chinese consumers during holiday seasons.

According to the group interim results by Dickson Concepts, the parent company of Harvey Nichols, consumer sentiment in Hong Kong remained weak due to the decline in stock and property markets and high interest rates.

Meanwhile, with the significant growth of eCommerce in the past three years, the rapid development of the major luxury brands’ presence in China, and the narrowing of price differences between China and Hong Kong, Chinese tourists coming to Hong Kong are no longer focused on shopping as they used to be before the pandemic, said Dickson Poon, group executive chair, Dickson Concepts. 

The weaker-than-expected retail spending during the Golden Week holidays in May and October, coupled with locals increasingly travelling aboard during the holiday seasons, means there is no longer a need to operate multiple large-scale department stores in close proximity, Poon added. 

The company has decided to give up the lease for the 60,000 square feet Harvey Nichols store at Landmark and consolidate its Harvey Nichols activities at Pacific Place store which offers both physical and online services.

"We believe that this strategic decision will enable us to consolidate and further build our local customer base at Pacific Place while significantly reducing our cost base which should have an even greater positive impact on our bottom line," Poon said. 

In Taiwan, despite the weak consumer sentiment, the group managed to achieve a 8.5% growth in sales turnover and record profits with an increase of 23.4%. during the period. This is a direct result of continued aggressive control on margin, operating costs and inventory.

The company will also look to its presence in mainland China as it is optimistic regarding the long-term outlook of the region despite cautious consumer sentiment and spending. The group will continue to seek new investment opportunities to diversify and broaden its earnings base.

In general, the group recorded a revenue of HK$1,272.4m for the six months ended 30 September 2023, up 26.1% up compared to HK$1,008.6m in the same period last year.

Back in September last year, Poon Dickson Pearson Guanda, an executive director of Dickson Concepts, has been appointed as chief operating officer of the company with effect from 1 September 2022. 

Poon joined the group as a general manager in October 2016 and was appointed as an executive director in December 2018. His responsibilities include overseeing the group’s retail business in Hong Kong and Mainland China. 

In Hong Kong, he led the launch of a new retail concept combining physical and digital retail under Harvey Nichols, resulting in a substantial decrease in overhead costs and a significant increase in product offering through Harvey Nichols’ digital platform, said the statement. 

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