Hong Kong Transformers restaurant operator denies closure rumours, says has growth plan

The operator of the Transformers-themed eatery says it has no intention of shutting down the Causeway Bay branch, after closing an outlet in Tseung Kwan O

Hong Kong property

Cheryl Arcibal

Published: 9:04pm, 12 Jul 2024

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The group behind the Transformers: The Ark restaurant in Causeway Bay denied that it was planning to shut down its outlet in Hong Kong even as an overall softening in retail spending was affecting its operations, according to a spokesman.

The operator, A La Carte, confirmed it had closed a Transformers branch in Tseung Kwan O, but intended to continue operating the Russell Street eatery, according to Tony Smyth, senior vice-president for corporate development and communications at iFree group. A La Carte is the group’s food and beverage division.

“We have no intention of closing down our flagship store,” Smyth said. “Our fit-outs are high quality and the Causeway Bay outlet is integral to our expansion plans.” The restaurant’s lease expires in 2026, he added.

The company closed the Tseung Kwan O branch on July 2, within months of opening earlier this year.

Smyth said the Tseung Kwan O outlet did not thrive because of “wrong demographics and that the expected bigger rebound of the Hong Kong economy did not materialise”.

The owners of Soundwill Plaza, where the restaurant is located on Russell Street, declined to comment when contacted by the Post.

The Transformers’ Ark restaurant on Russell Street features a retail section dedicated to the franchise behind Optimus Prime and other Autobots. Photo: Robert Ng

Market sources said the landlord was looking for a new tenant or tenants to occupy the 4,540 sq ft space spread over three floors.

Apart from the slower than expected growth, Hong Kong’s retail sector is also suffering from residents spending more either across the border in Shenzhen and Guangzhou or overseas.

As of end-June, outbound travel by the city’s residents had exceeded 2018 levels on an annualised basis, according to a report released earlier this week by S&P Global Ratings. Crossing the border into Shenzhen for shopping and dining at comparatively lower prices has also become more popular among local residents.

Meanwhile, online shopping is eating away at retailers’ revenues, as the segment’s share of total retail sales rose to 8.7 per cent in May, higher than the average of 8.1 per cent from 2020 to 2022.

At the same time, tourist arrivals have not fully recovered and spending by same-day visitors from mainland China remains lower than in 2018, S&P said.

Smyth said that to weather the crisis, the restaurant is rolling out promotional activities and efforts to appeal to a bigger customer base, including party packages, school events and regular updates of the menu.

“A lot of business in Hong Kong is suffering,” Smyth said. “Many of our peers are struggling too.”

Property agents said A La Carte was paying HK$1 million (US$128,000) a month for the space, but Smyth declined to reveal the monthly rent.

Burberry, the previous tenant, was said to be paying HK$2 million a month. The British luxury house paid HK$8.6 million in monthly rent at Soundwill Plaza in 2015 at the height of Hong Kong’s retail boom.

The Ark opened in April last year and has been selling Transformers-stamped hamburger buns as well as figurines of the famed robot series.