Twilight has come for the retail industry in Hong Kong, said cosmetic outlet operator Sa Sa International (0178) chairman Simon Kwok Siu-ming, although he remains optimistic of better days ahead.
The week-long national holiday saw improved sales for the firm, and he hopes the uptrend is sustainable for the rest of the year, especially during Christmas and New Year high season. Regarding the mainland tax reform on luxury cosmetics, with the Chinese government cutting taxes from 30 percent to 15 percent starting this month, Kwok said it came unexpectedly, and it’s too early to determine its impact on Sa Sa.
But he expressed confidence in Hong Kong products. “I think it is more important to know that authentic and quality goods can be bought here,” he said.
Kwok noted Sa Sa managed to open several outlets in recent months. But under pressure to reduce operating costs, he hoped shop rents can come down to reasonable levels soon, so that there will be no staff layoffs or pay reductions.
Sixty percent of Sa Sa sales came from neighborhood areas, and the retailer said earlier it will shift away from the tourist areas if landlords refuse to slash rents.
But Kwok said the firm was able to find cheaper outlets, as a contract was renewed at a site opposite the Sogo store in Causeway Bay at 60 percent lower monthly rent of HK$800,000.