Luxury brands are making way for Hello Kitty in glitzy malls of Hong Kong

In Hong Kong, fancy purses are out, sneakers are in.

The United States luxury handbag maker Coach Inc opened its four-story flagship store in the heart of Hong Kong's Central district in June 2008, with a celebrity-studded, champagne-fueled party.

In August, the company quietly terminated its HK$5.6 million ($723,000) per month lease and Adidas is moving in - paying 23 percent less in rent, according to Colliers International Group Inc. This is not an isolated case.