Sat, Jul 20, 2019 page10

• Hong Kong protests batter luxury retailers’ sales

  MAJOR CENTER: The territory accounts for between 5 and 10 percent of the world’s luxury sales, which have been affected by falling tourist numbers and store closures

  • Bloomberg
  • • 
    • 
    • 

  The impact from the Hong Kong protests is spreading to global luxury retailers, with jewelry and cosmetics sales hurt as shoppers and big-spending travelers stay away.

  Swiss luxury-goods maker Compagnie Financiere Richemont SA became the latest casualty, saying on Thursday that the street demonstrators dealt a blow to local sales. The owner of Cartier International SNC and Van Cleef & Arpels echoed Swatch Group AG in saying that the unrest in Hong Kong, the top export market for Swiss watches, weighed on sales, due to store closures and lower tourist arrivals.

  With restaurants and consumer brands already affected, retailers now face increasing disruption as shops from Hong Kong’s center to its suburbs have been forced into early closures due to a lack of customers.

  A peaceful gathering of tens of thousands of protesters on Sunday last week turned into a fight with the police at a mall in Sha Tin on the territory’s outskirts.

  The historic demonstrations have been brought about by Hong Kong Chief Executive Carrie Lam’s (林鄭月娥) bid to ease extraditions to the mainland. The proposal has prompted hundreds of thousands of protesters to take to the streets, bringing parts of the territory to a halt since early last month.

  HSBC estimates that 350,000 mainland Chinese tourists will stay away this year because of the unrest, SCMP reported.

  Flight bookings from Asia — excluding Taiwan and China — to Hong Kong fell 5.4 percent from June 16 to Saturday last week, researcher ForwardKeys said.

  Hong Kong remains an important center for wealthy Asian shoppers, particularly those from the mainland. China’s rising middle class has fueled growth in the luxury market, making up one-third of global high-end purchases.

  Hong Kong accounts for between 5 and 10 percent of global luxury sales, Sanford C. Bernstein analyst Luca Solca said.

  The setback comes at an inopportune time for retailers already facing headwinds from the US-China trade dispute, a depreciating Chinese currency that lowers mainland tourists’ purchasing power and the threat of a global recession affecting consumer spending, said Jennifer So, a senior analyst at Lego Asset Management Ltd (力高資產管理有限公司) in Hong Kong.

  “Retailers that rely more on tourist spending or discretionary spending like jewelry, cosmetics and hoteliers will suffer the most,” So said. “Online spending and e-commerce will fare better.”

  The Hong Kong Retail Management Association on Tuesday said that most of its members reported a single-to-double-digit drop in average sales revenue between June and the first week of July, when multiple demonstrations converging on major office and retail districts took place.

  Among these affected were Sa Sa International Holdings Ltd, (莎莎國際控股) a seller of cosmetics, which reported a 15.3 percent drop in same-store sales in Hong Kong and Macau for the three months through June. For the same period, Chow Tai Fook Jewellery Group Ltd (周大福珠寶) posted an 11 percent decline.
• Most Popular

  • 1

    US military declines to fire adopting Marine Mast

  • 2

    CGA expels Chinese vessels from Taiwan waters

  • 3

    Taiwan on alert over Chinese carrier

  • 4

    Taiwan ranked world's 14th richest country

  • 5

    Most willing to defend Taiwan: survey