Luxury brands gear for expansion

Bloomberg and June Chen

Seven luxury brands are planning to collectively double their footprint to more than 30,000 square feet at K11 Musea in Tsim Sha Tsui over the next four years, as the high-end real estate arm New World Development (0017) bets on a rebound in the city's premium retail sector to help ease property-market woes.

Audemars Piguet, Balenciaga, Brunello Cucinelli, Loewe, Saint Laurent and Van Cleef & Arpels will be giving their K11 Musea shops facelifts while Prada is set to unveil its inaugural store at Victoria Dockside.

"We are excited that many leading luxury brands are expanding at K11 Musea, especially in the context of the current Hong Kong retail sector," said Richard Cheung, executive vice president of K11 Group. "This is largely the result of the strong performance and very high sales productivity at their current stores at K11 Musea."

The K11 brand malls have been a key growth driver for New World's investment property sector. In the six months that ended in December, Musea recorded a 41 percent increase in sales from the year before, mainly driven by luxury spending, beauty care, and cultural activities, according to New World's financial report.

The K11 mall's luxury pivot offers one of the first clues to New World's turnaround plans after the developer, which has been grappling with higher debt levels than its peers, issued a warning last month of an expected loss of up to HK$20 billion for the financial year that ended in June.