This week in the news, HNWIs are driving China’s economy, Oriental Fortune is buying a stake in Ports HK, Hilton opens a resort in Yunnan, some parents educate their children on wealth by bringing them on a luxury villa tour, and Tod’s business in Hong Kong is slipping.
On the weekend before Children’s Day, during which many parents took their kids to a museum or park, some parents took the occasion to inspire their children to a future life of wealth. The destination was the Qingyuan City Heming Island Resort & Spa, a luxury resort and real estate development in Guangdong province, reports China Youth Daily. One of the development’s many luxury two-story vacation villas was open to the public for tours. The parents said that it was a good way to show their kids that they could achieve the same high social status and lifestyle if they worked hard.
Chinese private equity company Oriental Fortune is buying a 20 percent stake in Ports HK for an estimated HK$600 million (US$77.35 million). Oriental Fortune is expected to bring in a third-party investor to buy the remaining 80 percent. Hong Kong fashion and luxury goods company Ports Design, which is controlled by Blackstone, CFS, and PIEL and owns Ports HK, is divesting from the fashion and apparel business due to the “difficult and challenging” retail environment. Ports Design offers its products under the Ports International, Ports 1961, BMW Lifestyle, Armani Collezioni, Armani Jeans, and Versace brands. Ports Design had 310 retail stores as of the end of 2014.
Hilton Hotels & Resorts has announced the opening of Hilton Yuxi Fuxian Lake, its second hotel in Yunnan province. Owned by Yunnan Metropolitan City Investment Group and operated by Hilton Worldwide, the hotel is on the shores of Fuxian Lake, and features a Mediterranean architectural style and 346 guest rooms. The resort’s rooms feature furnishings that reflect Yunnan’s culture and offer private balconies with views of the gardens or Fuxian Lake. Guests staying in the executive rooms or suites have access to the Executive Lounge, which offers complimentary breakfast and refreshments, including evening cocktails.
The recent spike in China’s high-net-worth population is changing the country’s economy and the way its consumers think about wealth. According to a recent report by Bain and the China Merchants Bank, China’s population of high-net-worth individuals (HNWIs) exceeded 1 million last year. The Guandong province alone is now home to 100,000 HWNIs, and six other provinces have HNWI populations that surpass 50,000: Shanghai, Beijing, Jiangsu, Sichuan, Zhejiang, and Shandong. Their collective wealth reached $2.1 trillion, a 16-percent year-on-year increase, and is expected to grow by another 16 percent this year. Nearly 80 percent of these individuals are under the age of 50.
Similar to other luxury brands, Tod’s Group sales in Hong Kong have been impacted by the changing demographic of mainland Chinese tourists and China’s anti-corruption campaign. Tod’s Group, which includes flagship brand Tod’s, Roger Vivier, Hogan, and Fay, reported a 15 percent decline in China sales as traffic and spending at its stores have decreased. China sales were estimated at 53.9 million euros, accounting for one-fifth of its total global sales of 257.7 million euros. The company’s Chief Financial Officer Emilio Macellari told analysts in March that “the situation in China is still very tough, consumption there is not restarting at all.”
image credit: ports