Omega, the Swiss luxury watchmaker, has recently leased a new shop on Russell Street in Causeway Bay for HK$400,000 (US$51,404) per month. This location, once known as the world's most expensive retail strip, spans 795 sq ft and is adjacent to Omega's existing shop. This expansion occurs despite the struggling retail market in Hong Kong, which experienced an 11.8% drop in retail sales in July 2024. However, the luxury sector shows resilience, with Omega having previously opened two boutiques in December 2023. Tourist arrivals also saw a positive uptick, increasing by 9.3% to 3.9 million in July 2024, as Hong Kong aims to attract 46 million visitors in 2024, a 35% increase from the previous year. Raynald Aeschlimann, Omega's CEO, emphasized that the brand does not rely solely on tourists for its success. Average annual rents on Russell Street have significantly decreased from US$2,671 in 2018 to US$1,374 last year, prompting other luxury brands like Louis Vuitton and Giorgio Armani to expand their presence in Hong Kong. Experts predict a 5-10% growth in prime retail rents, indicating a potential recovery in the retail leasing market [25de8d34].
In a related development, Bakehouse, a popular bakery based in Wan Chai, is set to double its outlets from five to ten by the end of 2025, investing HK$31 million (US$3.98 million) in the expansion. Founder Gregoire Michaud attributes this growth to the rising demand for their signature sourdough egg tarts, which are sold at HK$12.50 each. The bakery currently sells between 18,000 to 20,000 egg tarts daily, contributing to an impressive annual revenue of HK$91.25 million. As part of its expansion, Bakehouse plans to open new locations in Tung Chung and Sha Tin and will increase its workforce by 50%, bringing the total number of staff to 450. This growth comes in stark contrast to the broader challenges facing Hong Kong's retail sector, where approximately 10% of high street shops are currently empty and over 700 restaurants have closed this year due to economic pressures. Despite these difficulties, the bakery sector appears to be thriving, with new openings and expansions being reported across the industry [d61951d7].