Sa Sa International has reported a massive 76.9-per-cent slump in Hong Kong and Macau sales during Lunar New Year as the coronavirus kept mainland Chinese tourists at home.
As a result, the company has shut 21 stores and will “substantially strengthen control measures” in order to reduce losses.
Besides the store closures, its executive directors have taken a 75-per-cent salary reduction for three months as the first in a series of cost-cutting initiatives. Inventory levels will be cut and the company is looking to reduce staff costs.
With Hong Kong Immigration Department figures showing an 85.5-per-cent year-on-year decrease in mainland tourist arrivals, the impact on retailers across categories generally frequented by visitors, such as luxury goods and cosmetics, is expected to be severe for many retailers in the territory.
Sa Sa International chairman Simon Kwok said that in Hong Kong, the company’s retail sales plummeted by 77.9 percent year on year.
“Such decline was mainly attributable to the novel coronavirus outbreak, resulting in a further decline of mainland tourist arrivals and poor local consumer sentiment.”
Falling store footfall saw a drop of 54.4 percent in the total transaction volume, with spending by mainland tourists down by 92.1 percent and that of local customers by 8 percent. The average sale per transaction among local customers fell by 25.6 percent.
Kwok said Sa Sa International’s retail sales in Macau plunged by 73.4 percent, with an almost 70 percent drop in total transaction volume. Mainland tourist spending fell by 76.5 percent and spending by locals by 29.4 percent.
Kwok said that with efforts to contain the coronavirus seriously affecting the mobility of mainlanders,
Sa Sa International will “closely review the market condition and adjust its product strategies”. “Facing the severe shortage of masks and disinfection products, the group strives to support Hong Kong and Macau SARs citizens to combat the coronavirus outbreak by going all outsourcing such products globally and selling them at reasonable prices to cater for their needs.”