Hongkong Luxury Retailers Were Hit Hard At The Beginning Of The Year Of The Sheep.

According to the media article on Friday, Hongkong retailers were hit by weak demand from mainland consumers in the beginning of the year of the sheep. Some companies experienced serious sales decline during the Lunar New Year holidays and dragged down their share prices.

The two largest luxury jewelers in Hongkong, Zhou Dafu Jewelry Group and Liu Fu holdings international, respectively, reported earlier this week that sales of same stores in Hongkong and Macao fell by 29% and 25% during the lunar new year.

The Lunar New Year is also the traditional selling season, usually known as the golden week holiday. Mainland tourists have leisure trips and shopping, giving gifts to each other. This long holiday usually takes place from the end of January to the beginning of February each year. The 2015 lunar new year begins in February 19th, which makes the sales volume relatively distorted.

Even so, although the sales volume of the 2015 Chinese New Year holiday in the doldrums is already in the market expectation, it still makes many analysts feel very surprised.

Kevin Lai, an analyst at Da ho securities, said: "the government report says that the sales figures are somewhat distorted due to the different time of the lunar new year, but we believe that only 1/3 of the sales decline can be explained by this reason." Lai Zhiwen said. He pointed out that even before the holidays, there has been a decrease in the number of foreign visitor arrivals, not just the number of visitors from mainland China. Hongkong government data showed that retail sales in January were nearly 15% lower than Hong Kong dollars in value.

Mid-range beauty products retailers Sasa International It was also hurt by the weak demand of mainland tourists. According to the company report, the same store sales fell 7% during the lunar new year. The statistics include proprietary stores, excluding authorized outlets and wholesale outlets.

In fact, since 2015, when Hongkong returned to China in 1997, the number of mainland visitors to Hong Kong fell for the first time during the lunar new year. Government data show that the number of visitors to mainland China during the Lunar New Year is 675155, less than 676297 in 2014. Earlier this week, Sasa's report also pointed out that the cost of tourists to Hong Kong has also declined.

Hongkong retailers have been relying on China's tourism boom for years to support growth, which is particularly evident in Ultra Luxury goods. But the recent situation in Hongkong and the continuing crackdown on corruption by the Chinese government are hurting the demand for high-end products.

In addition, Hong Kong dollar The US dollar as a linked exchange rate has been strong in recent years, and the Japanese yen and euro exchange rate has plummeted, making many Chinese tourists more willing to go shopping in Japan and Europe.

In the statement, Lufu jewelry said that with the decline in the yen and euro exchange rate, "many high-end mainland consumers are attracted to Japan and Europe, resulting in a decline in sales in the Hongkong and Macao markets."

Zhou Dafu declined to comment on the decline in sales.

The share price of Lufu jewellery fell steadily from HK $30.65 per share in January 7th to HK $23.45 per share on Friday. Analysts pointed out that the decline in stock quotations is obviously due to the weak sales figures.

　　 Hong Kong Zhou Dafu, the tycoon Zheng Yutong family, reported a HK $8.70 per share on Friday, the lowest level since mid June 2013. Sasa's stock price was flat at HK $4.10 per share on Friday, but its lowest level since May 2012.

Lai Zhiwen pointed out that "sales figures are unlikely to rebound in the year. We will see many struggles in the first half of this year as the exchange rate changes dramatically and the efforts to combat corruption escalate.

However, the sales situation of Hongkong jewelers in the mainland of China constitutes a bright spot. The sales volume of Lufu jewelry and Zhou Dafu's mainland same stores increased by 15% and 11% respectively during the Chinese New Year. Katherine Chan, an analyst at Nomura Securities, said that Chen Jingyu's jewelry lagged behind its competitors because it was "less exposed than rivals" in the better performing Chinese market.

Mainland China accounts for about 20% of the total sales of Lufu jewelry, while Zhou Dafu's ratio is 60%.

However, with the slowdown of economic growth, the mainland's sales situation will also be under pressure for some time. China forecasts that the economic growth rate in 2015 will be around 7%, down from 7.5% in 2015.

Ryan Lam, an analyst at Hang Seng Bank, said there would be a lagging effect on the central bank's interest rate cut later in February, but there will be a slight rise in consumer demand in China. He said, "yes, we should have a careful interpretation of this. The outlook for the retail industry will be challenged throughout the year.