A Reuters survey shows six out of 10 listed Hong Kong retailers plan to freeze expansion plans or close stores in the wake of declining territory retail sales.
Reuters says that while for years, burgeoning numbers of mainland tourists have been buying up at large in Hong Kong stores, moves by the mainland government to restrict cross-border visits and efforts to reduce tariffs on imported goods are now subduing retail demand in Hong Kong.
Latest retail sales data released this week show sales of jewellery, watches and clocks, and valuable gifts – the most popular category for Chinese tourists – decreased by a massive 19.5 per cent in April compared to April 2014. That continued a trend evident since the latter half of last year when Occupy Central protests were the first of a series of factors discouraging tourism.
Reuters says filings for four of the retailers — jeweller Chow Sang Sang Holdings along with casual wear brands Bossini International Holdings, Giordano International and I.T. Limited — show a single-digit decrease in the number of their store networks over the last year.
Another four companies — cosmetics retailers Sa Sa International Holdings and Bonjour Holdings, luxury jeweller Emperor & Watch Jewellery and clothing brand Esprit Holdings — kept store numbers unchanged over the same period.
Only two retailers — jeweller Luk Fook Holdings International and Chow Tai Fook Jewellery Group — expanded their store network. But this year’s growth – of four per cent – reflected a halving of the normal growth rate of eight per cent or more recorded since 2009.
At the same time, major retailers are starting to pressure landlords for rent relief with savings of 10 to 15 per cent being the usual demand when leases come up for renewal.