What: Trading challenges have caused Burberry to close a second Hong Kong store location since the pandemic.

Why it is important: Burberry has closed a second store in Hong Kong. The flagship on Canton Road was too expensive for the brand estimated at around 6.5 million Hong Kong dollars, or 828,200 USD, a month for the prime location. In addition to high rent payments, Burberry has suffered from lockdowns and a lack of Chinese tourists in Hong Kong.

Since the introduction of broader controls between mainland China and Hong Kong in early 2020, in addition to waves of social unrest before that, luxury retail in Hong Kong has taken a big hit.

The brand admitted during its recent earnings call that trading in Hong Kong is “very challenging” because there are few Chinese tourists in the region.

Burberry will continue to invest further in China, position the brand for when the lockdowns lift and utilize the remaining 10 points of sales in Hong Kong to take full advantage of the rebound of tourism and China’s expected recovery.

Burberry closes Canton Road flagship