HONG KONG — Swiss watchmaker TAG Heuer is shutting a store in Hong Kong as high rental costs and declining numbers of customers weigh on profitability, according to the head of LVMH Moet Hennessy Louis Vuitton SE's watchmaking activities.

The brand has decided to close a store on Russell Street, one of the island city’s main shopping thoroughfares, Jean- Claude Biver said Monday.

“Traffic has diminished and rents have stayed high,” he said by e-mail.

European luxury-goods makers have recently spoken out about the high rental costs in Hong Kong, with Gucci owner Kering SA saying it may close some of its shops and Burberry Group Plc trying to lower its rent bill. Luxury spending in Hong Kong has been suffering since China began taking measures against extravagance among government officials in 2012.

Still, Hublot and Zenith may open two stores in Hong Kong next year as demand for those LVMH watch brands warrants expansion, Biver said. Those watchmakers currently have two stores each in Hong Kong.

“In total we foresee one or two openings for Hublot in the coming 24 months, and one, eventually two, for Zenith,” Biver said.

By Corinne Gretler; editors: Matthew Boyle, Thomas Mulier.