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Hong Kong retail sales suffer

Some 7,000 licensed retail establishments out of 64,000 in Hong Kong may close down in the next six months.

Social unrest and sometimes violent anti-China protests are deterring tourists, threatening the survival of smaller operators. Retail sales fell by a quarter in October from a year earlier, the steepest drop on record, while tourist arrivals fell by a whopping 43.7 per cent in the same month, squeezing malls and restaurants. 

Hong Kong ranks among the world’s top five luxury destinations. It has long been a magnet for brands attracted by the flow of visitors from mainland China and accounts for between five per cent and ten per cent of the annual global sales of luxury goods. Watchmakers in particular are likely to be hurt – Hong Kong is a major centre for high-end timepieces. Hermes has been forced to temporarily shut some of its five stores as well as an airport shop in Hong Kong. 

Hong Kong, which once accounted for around five per cent of global luxury sales, is now closer to two per cent. While the demonstrations might be a temporary disruption, a more structural shift is at play in the shopping habits of well-off customers from the Chinese mainland whose Hong Kong spending have long been buttressed sector sales.

 
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