HONG KONG, CHINA. DFS is to close its long-established DFS Hong Kong, Tsim Sha Tsui East store on 31 August.
The Chinachem store (which takes the name from its location in Chinachem Golden Plaza, Mody Road) was historically a fulcrum of the travel retailer’s business in Hong Kong.
However, a drastic change in market conditions characterised by a slump in Mainland Chinese traveller visitor numbers and spending has prompted the closure
The move is part of an ongoing review of the company’s global store network revealed by Chairman & CEO Ed Brennan in an interview with The Moodie Davitt Report last November.
As reported this month, DFS is also to close its operations in Sydney, Auckland and Queenstown, marking the travel retailer’s exit from the Oceania market.
DFS said, “While the Tsim Sha Tsui East location has historically been a strategic asset to DFS, the current market dynamics require us to focus on delivering exceptional experiences in our other key locations: DFS Hong Kong, Canton Road, and Causeway Bay (Beauty).
“We believe these two stores are best positioned to serve our customers and strengthen DFS’s presence in the Hong Kong market.
“DFS remains fully committed to Hong Kong, which is where our headquarters office is based. We look forward to welcoming customers to continue shopping with us at Canton Road and Causeway Bay.”
Downtown downward spiral
DFS is far from alone in facing profound challenges with the downtown duty-free model. As reported, King Power is to shut three downtown duty-free shops in Thailand – Srivaree and Mahanakhon in Bangkok and its Pattaya operation – on a phased basis from September.
Those closures are driven by prohibitively high operating costs set within the context of a fundamental change in consumer demographics.
As noted by King Power Chief Executive Officer Nitinai Sirismatthakarn, the three stores were designed to attract tour groups. However, their revenue has slumped as tourism habits are changing and more people are travelling independently. Soft Chinese visitor numbers and even softer spending have compounded the challenges.
In South Korea, Hyundai Duty Free is closing its Dongdaemun, Seoul store, effective 31 July, the latest victim of challenging market conditions in the Republic.
Rival Shinsegae Duty Free shut down its Busan downtown duty-free store (in Shinsegae Centum City) on 24 January.
Other closures over recent years in South Korea include Hanwha Galleria Duty Free, Yeouido, Seoul in September 2019; Shinsegae Duty Free, Gangnam, Seoul in July 2021 and Lotte Duty Free COEX, Seoul in September 2022. ✈
