High street retailer H&M is to close its flagship store in Hong Kong, it has been confirmed today.
Despite reporting a 12 per cent rise in profits over the first half of its financial year and comments from CEO Karl-Johan Persson that “our expansion plan remains intact”, the store is set to close in the Autumn of next year.
Opened in 2007, the space is to be taken over by Spanish clothing retailer Zara, according to the Wall Street Journal.
Rents continue to rise in the thriving Chinese territory thanks to a strong economy in the region, with numerous retailers flocking to gain a presence in the market.
Last month, luxury brand Louis Vuitton opened its debut Maison store in Shanghai while Chinese tourists to the UK increased their monthly spend by 11.7 per cent to £744 in the first five months of 2012.
A spokesperson for H&M acknowledged the booming marketplace, explaining that the retailer is performing well in Hong Kong.
“We continue to have very good sales in China and Hong Kong and we are adding new stores every year,” said the spokesperson.
“We can confirm that the store will close during the Autumn 2013.Sometimes we do close stores to open others, we are constantly looking for stores in the best location and at the best business deal.
“This year China including Hong Kong will be one of the largest expansion markets for H&M.”