Louis Vuitton Bags Defeating Jet Li Heroes in Hong Kong

Jet Li in Zhang Yimou's 2002 film "Hero" produced by Bill Kong of Edko Films. Kong’s characters are known for vanquishing their enemies with super-human feats. Source: Edko Films via Bloomberg

Bill Kong’s characters are known for vanquishing their enemies with super-human feats. Think Michelle Yeoh’s gravity-defying fights in “Crouching Tiger, Hidden Dragon” or Jet Li’s acrobatics in “Hero.”

In real life, the Hong Kong film producer is losing the fight against a more insidious adversary: the luxury handbag.

“High-class retail is killing the cinema business,” Kong says in an interview. “Cinemas are giving way to Louis Vuitton stores.”

Gone are the days when landlords in Hong Kong used movie theaters as a way to draw visitors to malls, says Kong, executive director of Edko Films Ltd. “Now they say ’Get out, we want LV.’”

No wonder, when a Louis Vuitton Monogram Empreinte Artsy MM bag sells for more than HK$20,000 ($2,578) in the city and mall owners get a share of the sale on top of rent.

“One LV bag is the equivalent of a full house of 150-200 seats,” he says. About 90 percent of Hong Kong cinemas are housed in shopping malls.

The huge influx of mainland shoppers to Hong Kong in recent years has produced long lines snaking outside Prada, Gucci and Christian Dior stores.

The number of cinemas has dropped to only 47 today from 77 locations in 1997, according to Hong Kong’s Motion Picture Industry Association. Broadway Circuit, Edko’s cinema arm with 14 cinemas, is Hong Kong’s largest chain.

Mainland Boom

In mainland China, meanwhile, the cinema building boom is getting out of control, says Kong, whose company opened the first joint-venture cinema in Shenzhen with China Film Group in 1983.

“It is becoming vastly overbuilt in certain areas such as Shenzhen and Wuhan,” he says. “In Shenzhen every subway station has one or two multiplexes.” Broadway has 19 cinemas, with 118 screens in China, and may open two more later this year in third-tier cities.

China’s cinema building will more than double the number of screens by 2015, from 6,200 at the end of 2010, according to Dan Mintz, chief executive of DMG Entertainment in Beijing.

At the end of 2009, the U.S. had 39,233 screens, up from 36,435 in 2004, according to the National Association of Theater Owners.

Suitless Style

Kong, 61, is a far cry from your typical Hollywood suit. Dressed in an open collar shirt, wind breaker and khaki pants, he could easily be mistaken for a typical middle class Hong Konger.

He’s worked with the region’s biggest A-list actors and directors, yet is disarmingly modest and shuns the limelight.

“It’s good to keep a low profile,” he says over a plate of spaghetti bolognaise during lunch in Hong Kong. “You get things done more easily that way.”

Kong credits his success making films in China because he’s a product of both East and West.

He left Hong Kong at 13, first for school in England and later at the University of British Columbia in Vancouver, to study civil engineering. After “fooling around abroad” and immersing himself in a culture of the Beatles and marijuana, he returned home at 27 to join the family cinema operation and film distribution business his father started in 1959.

By the late 1990s Hong Kong’s high real-estate costs were already starting to pinch.

“It was very difficult to be an independent film distributor in the late 1990s and the cinema business was getting expensive,” he says.

Ang Lee

That’s when he decided to team up with Taiwanese director Ang Lee, a longtime friend whose films Edko had distributed in Hong Kong.

His first foray in production hit pay dirt. “Crouching Tiger, Hidden Dragon” became the highest grossing foreign film in the U.S. and won an Oscar for best foreign film in 2001.

Kong went on to produce other hits including Zhang Yimou’s “House of Flying Daggers” (2004), starring Zhang Ziyi, and Ang Lee’s steamy spy film “Lust Caution” in 2007 with Tony Leung and Tang Wei. He also backed “Flowers of War” (2011) a thinly veiled Chinese propaganda film about the 1937 Nanjing Massacre starring Christian Bale.

Still, official Chinese attitudes toward foreign film makers are changing, as one of his next big projects illustrates.

He’s teaming up with French director Jean-Jacques Annaud to make a film based on the best-selling Chinese 2004 novel, “Wolf Totem” by Jiang Rong, a kind of Chinese “Call of the Wild.”

Chinese Partner

The Chinese partner in the co-production is state-owned China Film Group which answers directly to the State Administration of Radio, Film and Television.

When Annaud made “Seven Years in Tibet” in 1997, the film was banned in China for failing to toe the Communist Party line.

Annaud, who was selected to head up the international jury at the 15th International Shanghai Film Festival last month, is clearly no longer a persona non grata.

“You see how pragmatic the Chinese are. It’s no longer ’You hit me one time in the nose so I hate you for the rest of your life,’” Kong says.

Hong Kong mall owners say they are keen to show support for arts. MTR Corp. says one its malls, Elements, houses Hong Kong’s largest cinema complex.

“Having some entertainment elements,” Chris Heywood, senior portfolio manager at Swire Properties says, “provides an exciting variety and enhances customers’ overall shopping experience in Pacific Place.”

Muse highlights include Manuela Hoelterhoff on arts, John Mariani on wine and Martin Gayford on art.

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