Hong Kong Retail Sees Signs of Recovery

RAPAPORT… Sales of jewelry and other luxury items in Hong Kong slid in September, even as the slowdown in the market began to ease.

Revenue from watches, clocks and other valuable gifts fell 26% year on year to HKD 2.74 billion ($352.8 million) for the month. While the drop was significant, it was less sharp than the declines seen in the past few months, and could indicate the beginning of a rebound, Hong Kong’s Census and Statistics Department reported Monday. Sales in all retail categories slipped 13% to HKD 26.06 billion ($3.36 billion).

“The year-on-year decline in retail sales remained notable in September,” a government spokesperson said. “Nonetheless, having considered that the base of comparison in the month was not as low as in August, the performance of the retail sector has actually shown some improvement…as the third wave of the local epidemic abated.”

Retail is likely to remain challenging in the short term, given the two-week quarantine the Hong Kong government imposed on tourists arriving from mainland China — an important source of luxury sales — and the difficult job market. However, that situation is expected to improve.

“With the stabilization of the local epidemic and the recent relaxation of social-distancing measures, local consumption sentiment is likely to revive further,” the spokesperson added.

Revenue from jewelry, watches, clock and other valuable gifts slumped 60% to HKD 21.73 billion ($2.8 billion) for the first nine months of the year. Sales in all retail categories declined 29% to HKD 238.94 billion ($30.82 billion) for the January-to-September period.

Image: Hong Kong harbor. (Needpix)