U.S. clothing brand Abercrombie & Fitch (ANF) will call time on its flagship store in Hong Kong two years before the end of its lease, which expires in 2019.
The closure, announced Friday, is expected to be “substantially complete” by the second quarter of 2017 and will leave no remaining Abercrombie & Fitch-branded stores in Hong Kong. It follows the shuttering of some 50 U.S. stores in 2016 and a 14% decline in the company’s comparable sales from August to October compared with the same period last year.
The announcement comes at an interesting time for Hong Kong’s retail landscape. A survey published by Bloomberg on Friday shows that commercial rents are dropping in some of the world’s premier shopping spots—with prices in Hong Kong’s Causeway Bay undergoing the biggest fall.
Meanwhile, Abercrombie is paying HK$7 million ($0.9 million) in monthly rent for its store in the nearby Central district—reportedly double the rate of the previous tenant there, Shanghai Tang. The company says its decision will lead to a “lease termination charge” of approximately US$16 million in the next quarter.
The clothing brand’s latest pullout may speak as much to Hong Kong’s retail woes as it does to the waning appeal of the perennial preppy. Retail sales have fallen for 16 consecutive months in Hong Kong, and dropped by 9.6% in the first nine months of the year compared with 2015. Abercrombie follow U.S. fashion brands Forever 21 and Coach, which have also announced they’re quitting the city.
Helen Mak, senior director and head of retail services at researcher Knight Frank, told The South China Morning Post that after 10 years of retail growth, Hong Kong had started to lose its appeal to mainland tourists as a premier shopping destination.
“Hong Kong is not too special a place for shopping in Asia. Many mainland shoppers now choose to go elsewhere in the region, such as Japan, South Korea and Taiwan.” Mak said.
The sales slump is exacerbated by a decline in the value of yuan: that mean’s there’s less Hong Kong bang for mainland bucks. Abercrombie says it plans to open five new stores in mainland China by the end of January, according to the Post.
For more on Abercrombie & Fitch, watch Fortune’s video:
But some of Hong Kong’s resident brands are innovating in the midst of the crunch. Sports giant Nike (NKE), flip-flop brand Havaianas, and even cocoa-hazelnut spread purveyor Nutella have in recent months launched pop-up stores in an effort to beat the city’s sky-high rental costs and pique consumer interest, Fortune’s Michelle Toh previously reported.