Luxury international brands are slowly returning to Hong Kong. As the territory's once sky-high rentals continue their decline (down 30 per cent since their 1997 peak) and the negative effects of Sars wear off, consumer spending by locals and (often wealthy) mainland Chinese tourists is climbing.

Louis Vuitton, Prada, Christian Dior, Hermes and Ermenegildo Zegna have responded by taking 3,000 square feet to 10,000 sq ft of retail space for flagship stores in Hong Kong.

One new location for luxury brands is the IFC Mall in Central, which is targeting the sophisticated young female consumer.

Meanwhile, the Landmark, a major traditional upmarket shopping centre, is undergoing a US$210 million redevelopment to compete with the recently completed 88-storey Two IFC, Hong Kong's tallest building.

Louis Vuitton and Christian Dior are reportedly planning to take more space at The Landmark, while Harvey Nichols announced last month it will also open in the shopping centre in 2005.

Meanwhile Prada will open a two-storey shop in Alexandra House next spring and Hermes will open a flagship store at Galleria some time in 2004.