Hong Kong’s top jewellery firm Chow Tai Fook and cosmetics retailer Sa Sa saw sales declines of at least 20 percent during the key Lunar New Year shopping season, as China’s slowing economy weighed on consumer spending.
Chow Tai Fook Jewellery Group Ltd, Hong Kong’s largest jewellery firm by market value, saw its retail sales drop by almost a third in mainland China and by 23 percent in Hong Kong and Macau between Jan. 25 and Feb. 14, compared with the previous year’s Lunar New Year period. The buying spree usually happens a week or more before the start of Lunar New Year, which fell on Feb. 8 this year.
Same-store sales were down 31 percent in mainland China and down 22 percent in Hong Kong and Macau, Chow Tai Fook said in a filing to the Hong Kong stock exchange on Wednesday.
“The management anticipates the retail business environment will continue to be challenging for the fourth quarter and the sales performance will be worse than that of the third quarter,” the jeweller said.
China’s economy, which posted the slowest growth since 2009 in the fourth quarter, and the government’s crackdown on corruption have stifled spending among Chinese consumers, who typically flock to Hong Kong to shop for everything from handbags to milk powder.
On Wednesday, another prominent retailer in Hong Kong also reported dismal sales. Sa Sa International Holdings Ltd, which has a store in almost every corner of Hong Kong, posted a 20 percent drop in retail sales in Hong Kong and Macau over Feb. 8-14, compared with the previous year’s Lunar New Year period. Sa Sa’s same-store sales fell 19 percent over the same period, it said in a filing to the Hong Kong stock exchange. The announcements came after Hong Kong’s market closed on Wednesday. Chow Tai Fook’s shares ended 6 percent lower, while Sa Sa’s stock was down by 0.9 percent, versus the main Hang Seng index’s 1 percent fall.