Retailers brace for Golden Week holidays' biz losses

Updated: 2014-09-30 07:07

By Sophie He and Selena Li in Hong Kong(HK Edition)

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 Retailers brace for Golden Week holidays' biz losses

Protesters occupy a main shopping street in Mong Kok district on Monday. Jewelry stores along the street are seen closed due to the demonstrators' blockade. Edmond Tang / China Daily

HK could see a year-on-year decline of its retail sales in 2014, the first time since SARS, says business leader

Hong Kong's retailers are the latest victim of the "Occupy Central" movement, as shops closed and concerns are mounting ahead of the National Day holidays (Oct 1-7), due to the blockade brought by the unlawful assemblies in Causeway Bay, Central and Mong Kok, the city's busiest shopping districts.

Caroline Mak, chairman of The Hong Kong Retail Management Association (HKRMA), warns that the "Occupy" will have certain impact on local retailers considering the disappointing retail sector's first half year results, if the September and October sales do not pick up. "Hong Kong could see a year-on-year decline of its retail sales in 2014, which would be the first time since the outbreak of SARS in 2003," she said.

"It's (a year-on-year retail sales decline) that could be significant for the city, as Hong Kong's retail sales have increased for many consecutive yearsand a decline could affect the employment in the sector and the negative effect could be spread to many other sectors," Mak said in a conference call on Monday.

Among many other local retailers, SOGO Causeway Bay store was closed on Monday. The store generated HK$9.1 billion of sales in 2013, which means that it could cost the department store about HK$25 million revenue per day if doors remained closed.

Chow Tai Fook Jewelry Group Ltd, Chow Sang Sang Holdings International Ltd and Luk Fook Holdings International Ltd also have shut over 25 outlets on Monday while some other stores opened late or closed early.

Luk Fook's Hong Kong same-store sales, or revenue generated by retail chain's existing outlets over a fiscal year, will probably drop 20 percent to 30 percent during the "Golden Week" holidays, chairman Wong Wai-sheung told local media.

Collin Porter, manager at the Dog House, a Western restaurant on Lockhart Road near Wan Chai, told China Daily that the restaurant which usually received around 100 customers for lunch only saw 25 customers on Monday.

"We didn't expect the Occupy could affect our business, after all it's not Central. But people gathered from the alleys and protesters were spreading between here to Admiralty. That really caused a problem," Porter said, adding that there is a likelihood of his shop suffering a loss of HK$25,000 per day if the demonstrations continue.

"I am concerned but what else (can) we do?" said a pharmacy owner in his 40s down under the Wan Chai Computer Centre, pointing at the front of the shop.

"That's the loading area for mainland tour buses so this shop is where crowds of tourists walk in and out. But with the road being blocked there is nearly no traffic today. "

A noticeable decline was also seen at luxury retailers that sell ladies handbags. A Prada salesman in Central said that only few customers came into his store since 7 pm on Sunday.

"And as a luxury retailer that attracts a 50-50 ratio of mainland and local clients, the potential sales loss is hard to anticipate in the coming Golden Week, which is a traditional peak season for tourists going on a buying spree," said the salesman.

According to official data released on Monday, the value of total retail sales in August 2014 increased by 3.4 percent over a year earlier.

But for the first eight months of 2014 total retail sales decreased by 1 percent in value over the same period a year earlier.

"The city's retail sales would have to pick up in the last four months of the year in order to see a full year growth," said Mak, adding that although it was very difficult to predict the exact impact of "Occupy" on local retailers, if business activity fails to resume to normal levels very quickly, there is a possibility the total retail sales in 2014 could be smaller than it was in 2013.

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(HK Edition 09/30/2014 page4)