Retail giants to close HK stores
▶ Consumption needed amid shrinking tourism: expert
Hong Kong retail giants Chow Tai Fook (CTF) and Sa Sa announced they would close stores in the city while actively exploring the market in the mainland and surrounding countries amid the shrinking tourism market in Hong Kong from the impact of monthslong social unrest.
CTF, the biggest jewelry retailer in China, said in an email to the Global Times on Thursday that the group would close 15 stores in Hong Kong, mostly located in Causeway Bay, Monk Kok and Tsim Sha Tsui, by the end of March 2021.
The 15 stores account for one-fifth of CTF’s stores in Hong Kong, Ta Kun Pao reported.
Sa Sa International Holdings, a Hong Kong-based cosmetics retail chain, would also close 25 percent of its stores in the city in the next 18 months following a decline of 72 percent in deals with mainland visitors in the third quarter last year, according to a report the company sent to the Global Times. Sa Sa’s yearly sales cut by half in 2019 compared with 2018.
While closing stores in Hong Kong, the CTF group said they plan to open about 600 outlets in the mainland in the 2020 fiscal year (from April 2020 to March 2021), mostly in counties and towns. CTF will also actively develop its potential markets in neighboring countries such as the Philippines and Thailand.
CTF owns a total of 3,789 stores globally with 3,636, or 96 percent, in the Chinese mainland, which accounts for about 70 percent of the group’s total business turnover, Hong Kong media reported.
The situation is not unexpected given the constantly shrinking tourism industry of Hong Kong from the impact of months-long social unrest, Liang Haiming, chairman of China Silk Road iValley Research Institute, told the Global Times on Thursday.
Data released by the Hong Kong Tourism Board on Wednesday shows 55.9 million trips to Hong Kong were made in 2019, a year-on-year decline of 14 percent.
The apparent decline started in July after the protests erupted, according to the data.
The economic situation of Hong Kong will worsen, Liang said. He estimated a decline of 6 percent in Hong Kong’s GDP in the fourth quarter and a yearly decline of 1.5-2 percent in 2019 due to plummeting individual consumption and fixed-asset investment.
The Hong Kong government on Tuesday announced it would allocate HK$10 billion ($1.29 billion) in new relief measures for grassroots and underprivileged people in the city.
They were also consulting the public on the 2020-21 budget and would propose measures to support enterprises, safeguard jobs and stimulate the economy to further address the needs of the community, media reported.
But these measures will receive no response unless the social unrest is settled, Liang warned, calling on the Hong Kong government and enterprises in the region to carry out measures to boost domestic consumption to stabilize the economy amid the unrest.
Hong Kong residents used to contribute about 60 percent of the region’s yearly retail sales, but they dared not go out for safety reasons. The government can carry out preferential policies on public traffic to attract them to come out, Liang said.