What: Sincere expects closing its Central department store to cut sales but narrow losses, after first-half revenue fell 31% and a failed lease renewal left it with one store in Mong Kok.

Why it is important: Hong Kong's growing retail sales are not reaching its oldest department store, which shows that rent, rather than demand, now sets the limits for legacy operators in prime districts.

The Sincere Company said in a stock exchange filing that it had sought to renew the lease on its ground-floor store at 189 Des Voeux Road Central, which expires on December 31, but could not reach agreement with the landlord. The store will close in early December. Sincere is looking for new premises in Central or Sheung Wan but has not found a suitable site.

Until then, its department store business will run from a four-storey shop at King Wah Centre on Nathan Road in Mong Kok and an online store. Sincere closed its Dragon Centre branch in Sham Shui Po on January 4 after three decades.

Revenue fell to HK$44.3 million (US$5.65 million) in the first half of 2026, while the net loss narrowed to HK$21.4 million from HK$26.5 million. Directors expect lower sales once Central closes, though savings on rent and overheads may narrow operating losses.

The closure comes as Hong Kong retail sales rose 5.6% year on year in August to HK$32.1 billion. Economist Simon Lee Siu-po noted that sales remain below the HK$38.2 billion of August 2018.

Founded in 1900, Sincere pioneered fixed prices, sales receipts and female shop assistants in Hong Kong.

IADS Notes: The Central closure was first reported as a lease failure, with high rents and online competition identified as the underlying pressures even as citywide sales grew (South China Morning Post, October 2026). Visitor numbers have since recovered faster than visitor spending, which last year remained 44% below 2018, and seasonally adjusted retail sales fell 4.6% in the three months to August while department store categories barely grew (Inside Retail Asia, October 2026). Landlord terms have become decisive for legacy operators elsewhere. In Paris, BHV Marais filed for receivership after the compensation it expected from Brookfield for handing back more than half of the store went unpaid, turning a downsizing deal designed to halve its rent into the trigger for the filing (Fashion Network, October 2026). In Korea, Lotte and Hanwha Galleria are leaving branches ahead of lease expiry to concentrate capital on their strongest stores, where the top 10 of the five major operators' 65 stores already generate 49.8% of sales (The Chosun Daily, September 2026). In Singapore, Metro is letting its Paragon and Causeway Point leases run out and moving to smaller multi-concept formats after a US$8.8 million net loss, in a market where rent-paying department store tenants face more strain than destination operators in prime positions (Inside Retail, July 2026).

Sincere expects lower losses as it closes its Central store in Hong Kong