Shopping malls operators seems reluctant to discuss rent-cut with tenant.
759 STORE, an expanding fast retailer of daily necessities owned by CEC International Holdings (0759.HK) since 2010, will close 4 outlets out of its 260 stores in Hong Kong. All of the closing stores are located in shopping malls managed by The Link REIT (00823.HK), the first real estate investment trust listed in Hong Kong.
Seeking to cut rental cost to overcome the softness in retail market, 759 Store has discussed the rent cut with The Link REIT but is rejected.
CEC International Holdings Ltd., the operator of the 759 Store chain, is closing four of its shops amid the lackluster retail climate in Hong Kong.
In attempt to further diversify from its mainstay snack and beauty products businesses, the firm is seeking a Chinese medicine license for the sale of traditional soup packs in 100 of its outlets.
The firm has 260 outlets. Some smaller ones will be converted into larger shops, the Hong Kong Economic Journal reported Monday, citing 759 chairman Lam Wai-chun.
Lam said the chain has been seeking to cut its rental costs but failed to secure reductions in rent for four outlets in malls managed by The Link REIT.
He said his firm’s new online retail business has broken even since August. But Lam said profits are expected to be slim given the high cost of logistics in the city.
The chain has rewarded customers with the savings in rent from consolidating some of its outlets and entering the online retail sector, offering sales at prices up to 40% lower than usual.