Why Did the Page One Bookshops Fail in Hong Kong?

The Page One bookshop operations in Hong Kong went into receivership in November 2016. This lasted for several years, causing considerable financial strain on the business. Although the Singapore-based headquarters did not issue a public statement, it was known within the publishing and printing trade that the Hong Kong operations had been in financial troubled for quite some time. This issue is not uncommon in Hong Kong, where the high and skyrocketing rent has led to the closure of many businesses.

The High Rent Issue in Hong Kong

One of the main reasons why the Page One bookshops failed is the sharp increase in rent for shop spaces in Hong Kong—often referred to as the world's most expensive real estate market. Since the late 1980s, numerous 'Westernised' bookshops have closed down due to the high rent costs. Notable among these were bookshops such as Harris Bookshop on Ice House Street, which operated in the same location for about a century before closing in the late 1980s.

The Impact of Short Retail Shop-Space Leases

Another significant factor contributing to the failure of the Page One bookshops is the short duration of retail shop-space leases in Hong Kong—typically no more than five years. After this period, landlords drastically increase the rent, often by as much as 20 to 200 per cent. As a result, businesses find it extremely challenging to operate and plan without a long-term lease. Many restaurateurs and retailers in Hong Kong have faced formidable rent hikes, making sustainable business operations nearly impossible.

The Moving Behemoth: My Personal Experience

From personal experience, I can attest that the issue of rising rent is a constant struggle. Over the past twelve years, I've had to relocate my office three times due to increasing rent. My last lease was drastically increased to $400, which prompted me to choose to move to a different location. This example illustrates the difficulty many small businesses, including bookshops, face in maintaining a consistent location and business operations.

Leap Across the Pond: A Contrast in Longevity

The situation is starkly different in London, where many bookshops, such as those along Charing Cross Road between Leicester Square and Tottenham Court Road Tube stations, have been operating for over a century. This longevity is attributed to the fact that many long-term lease agreements can be negotiated or extended, providing a level of stability that is often lacking in Hong Kong.

Bookshop Management and Customer Behavior

Another aspect that led to the decline of the Page One bookshops in Hong Kong is the unique management approach at these bookstores. Unlike many other bookshops, Page One allowed customers to read books freely. While this might seem beneficial, it also led to book damage, as customers often folded pages and abused the books until they were no longer in a sellable condition. This issue further eroded the revenue of the bookshelves.

Conclusion

While the Page One bookshops faced a myriad of challenges, the combination of high rent, short-term leases, and poor book management practices contributed significantly to their failure in Hong Kong. These issues are emblematic of the challenges faced by many retail businesses in the city. Understanding these factors can provide insights into improving business sustainability in a rapidly changing real estate market.

Keywords: bookshop failure, Hong Kong retail, high rent