Date
20 September 2017
Chow Tai Fook Jewellery says third-quarter same-store sales growth slipped nearly 30 percent in Hong Kong, Macau and other Asian markets excluding China. Photo: HKEJ
Chow Tai Fook Jewellery says third-quarter same-store sales growth slipped nearly 30 percent in Hong Kong, Macau and other Asian markets excluding China. Photo: HKEJ

HK luxury retail sales to stay depressed amid China woes

Hong Kong luxury retail sales, especially in street shops in prime areas, will continue to soften next year due to a deepening anti-corruption campaign in mainland China, a lackluster property sector and a slowing economy, according to an international rating agency.

A change in the mix of Chinese tourists visiting Hong Kong will also affect sales, Fitch Ratings Inc. said in a statement Thursday.

“A higher proportion of mainland tourists from lower-tier cities will mean less spending power while shoppers are likely to spend less with the disappointing housing and economic performance,” it said.

Luxury retailer Chow Tai Fook Jewellery Group Ltd. (01929.HK) saw same-store sales growth tumble nearly 30 percent in Hong Kong, Macau and other Asian markets excluding China in the third quarter, according to a regulatory filing.

Cosmetics retailer Sa Sa International Holdings Ltd. (00178.HK), which is popular among Chinese tourists, reported a 6.7 percent fall in average big-ticket purchases by mainland customers between April and September.

It did not renew leases on shops in tourist districts due to slower growth in overnight mainland tours, it said in a separate filing.

Meanwhile, a substantial fall in residential prices will discourage private consumption, dragging on retail rentals, Fitch said.

It expects domestic consumption to post single-digit growth next year given a low unemployment rate.

The Hong Kong government expects retail sales growth to have eased 0.4 percent in the first nine months this year compared with increases of 11 percent for the whole of last year, 9.8 percent in 2012 and 24.9 percent in 2011, the Hong Kong Trade and Development Council said in a statement Monday.

In the first eight months of the year, retail sales slipped 1 percent from the same period last year despite a 2.8 percent rise in August alone, the Census and Statistics Department said in a statement in September.

Sales of jewelry, watches and clocks, and valuable gifts fell 6.1 percent by value in August compared with a year earlier, it said.

– Contact the reporter at [email protected]

RA

Ayishah Ma is a financial reporter on Greater China issues.

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