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Hong Kong’s US retail invasion: J. Crew next to move in

Posted: 07/31/2012 11:05 am

One of the big benefits of living in the PRD is having access to all that Hong Kong offers just south of the border. While those in Shanghai and Beijing get their “authentic” China experiences, we’re fortunate to get the best of China where we live with the added convenience of having access to the foreign retail chains in Hong Kong, cheap electronics, and even a wide selection of books unavailable on the mainland.  (Not to mention fast and unfettered Internet when it’s needed).

For those that like to head south to pick up items unavailable up here, you’re going to like this: US fashion retail icon J. Crew is moving in.  The brand – adored by the likes of First Lady Michelle Obama – is now scouring Hong Kong looking for a place to open a flagship store.

J. Crew won’t be the first US chain to open in the territory, either.  The city has seen a US retail invasion over the past few years with the Gap having opened in Central and Abercrombie and Fitch set to open on Pedder Street on August 11.  J. Crew has over 200 retail stores in the US and Canada and believes entering Asia through Hong Kong – which is seen as a mature market – is a stepping stone to further growth in China.  After all, Hong Kong has a strong combination of local consumers and 42 million tourists, including 28 million mainland visitors.

J. Crew chairman and CEO Mickey Drexler told Bloomberg today: “You must be in Hong Kong, you must be in Shanghai and… We need to grow quickly.”

While western brands are moving in, there are signs of a spending slowdown in Hong Kong. Figures for October 2011 showed growth of 23 per cent, but in May 2012 it tumbled to 5.8 per cent, the slowest pace of growth for 18 months.

There’s no word on when the new J. Crew store will open.


Crackdown on visas for locals could make crossing into Macau easier for laowai

Posted: 06/27/2012 2:51 pm

Gongbei Border Control

You might be able to speed through Gongbei Port and into Macau soon, as Guangdong appears to be tightening visa requirements for Chinese tourists.

A report from the Chinese-language Macau Daily News cited unnamed sources saying local officials in neighbouring Guangdong could limit the number of Macau visas issued for locals, coupled with a limit on overseas spending on credit cards. Despite its reunification with China in 1999, Macau is still considered “overseas”.

Major Hong Kong-listed Casino operators Sands China, Galaxy, MGM China and Wynn Macau saw shares tank on the news on Tuesday, but analysts are split on the speculation.

From Bloomberg:

“Recent weakness in Macau gaming revenue and visitation growth could be partially explained by the visa restrictions and reduction in China UnionPay limits highlighted by the Macau Daily,” Cameron McKnight, an analyst at Wells Fargo & Co., said in a June 25 research note.

“The report on visa tightening is a bit speculative,” said Grant Govertsen, a Macau-based analyst at Union Gaming Group. “We haven’t seen anything so far to convince us this is happening.”

While Reuters reports:

“There has been no restriction of visas,” said Gabriel Chan, analyst at Credit Suisse in Hong Kong

Chan said new measures recently put in place should actually should encourage the flow of visitors by making it easier for residents to apply for a visa and lengthening the opening hours of the border gate that connects Macau to the mainland.

The numbers Macau are dealing with are huge, and could affect the gambling-heavy SAR.
From Bloomberg:

Macau casino gambling revenue rose 7.3 percent in May, the slowest pace since July 2009.

Reuters said:

About 25 million visitors from Greater China flocked to the specially administered region in 2011 – the only place in China where nationals can legally gamble at casinos – making up about 90 percent of total visitors.

Long queues at the Gongbei border between Zhuhai and Macau are an all too often occurrence as foreigners bemoan the sheer volume of people crowding into the border facility.  Unlike at Lo Wu/Luohu Port connecting Shenzhen with Hong Kong, Gongbei Port often doesn’t differentiate between foreigners and locals, resulting in long queues all around.

The last time local entry into Macau was tightened was back in 2008.


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