Luxury fashion retailers including Prada and Cartier are counting the cost to their businesses as political unrest in Hong Kong continues. The Hong Kong Protests, which had another spate of violence on October 1, are continuing to dispel tourists and force shop closures.
Hong Kong is ranked as one of the world’s top five luxury shopping destinations, drawing in visitors from mainland China and beyond. According to Bernstein analysts, the city brings in between five and 10 per cent of the estimated $285 billion annual global sales of luxury goods. However, data on Wednesday revealed retail sales fell 23 per cent in August year-on-year – the biggest decline on record. The sales value of jewellery and other valuable accessories also decreased by 47 per cent.
Visitor arrivals also saw a drop of 39 per cent, as the amount of of mainland Chinese tourists travelling to Hong Kong fell by 42 per cent. Luxury goods in Hong Kong are known to be cheaper than in mainland China – sometimes half the price.
“We don’t see any light at the end of the tunnel,” Hong Kong Retail Management Association chair Annie Yau Tse said. Hong Kong is a major centre for high-end time pieces and as a result watchmakers in particular are in trouble.
The Swatch Group and Cartier’s parent company Richemont depend on Hong Kong for over 10 per cent of their global sales. Approximately 30 shopping malls have closed since the anti-government protests started several months ago. The closures have occurred around the same time as the annual Golden Week holiday – which normally is one of the busiest times for retailers in the city. Hermes said in September it had been forced to temporarily close some of its Hong Kong stores.
