Hong Kong jewellery retailer and wholesaler King Fook Holdings Ltd issued a profit warning to shareholders, citing rising rental costs.
In an announcement to the Hong Kong Stock Exchange, the company said profit for the year ended March 31 2011 "will be substantially lower than that for the previous year mainly as a result of the significant increase in rent."
Most of King Fook’s eight stores in Hong Kong are located in prime shopping locations in Central, Causeway Bay, Admiralty and Tsim Sha Tsui. Lease of payments of King Fook properties were more than 11 percent of revenue in the first half ended September 30, 2010, according to a report in The Standard
This year, Hong Kong overtook Sydney as the world’s second-most expensive city to lease shopping space after rents surged 46 percent in the first quarter from the previous three months, according to a Bloomberg report.