Low Diamond Demand, Struggling Chinese Economy Dent TSL

Hong Kong-based jeweler Tse Sui Luen (TSL) reported a loss in the first fiscal half amid economic challenges in China and dwindling demand for diamond jewelry.

The company’s net loss came to HKD 58.3 million ($7.5 million) for the six months that ended September 30, compared with a profit of HKD 1.8 million ($230,000) a year ago, TSL said last week. Sales for the period rose 8% to HKD 1.35 billion ($172.8 million).

Revenue in mainland China, TSL’s biggest market, decreased 3.2% to HKD 870.6 million ($111.7 million) as consumers tightened their budgets in light of the challenging economy. The company also sold more gold products as diamond demand dropped.

“Affected by international economic concerns and China’s property sector challenges, consumers are more conservative in their spending,” the company stated. “The Chinese government has rolled out measures to bolster consumer confidence and speed up economic recovery, which has led to some improvement in retail sales. Riding on the uptrend of pure gold demand, the group has focused more on [that] business to partially compensate for the loss of sales caused by the sharp decline in diamond demand.”

In Hong Kong and Macau, sales surged 41% to HKD 407.5 million ($52.3 million) as the municipality saw a steady rebound in tourism following the reopening of its border with mainland China. The company also benefited from the Hong Kong government’s distribution of new stimulus vouchers, as well as large-scale campaigns to stimulate the economy.

“These government initiatives helped the group to achieve a notable increase in the turnover of its Hong Kong and Macau retail business,” Tse Sui Luen added.

Source: DCLA

Hong Kong Retail Sales Still Struggling to Recover

                             Hong Kong Retail

Hong Kong’s hard-luxury market saw its weakest growth figure for six months as the retail sector’s rebound ran out of steam amid a lack of tourism.

Revenue from jewelry, watches, clocks and valuable gifts grew 27% year on year to HKD 3.2 billion ($410.6 million) in July but was still 42% lower than in the same month of 2019, the municipality’s Census and Statistics Department reported Tuesday. The increase was also gentler than June’s 32% year-on-year growth and was the thinnest rise since January, when Hong Kong was struggling with a fourth coronavirus wave.

“Retail sales continued to increase in July over a year earlier as the local epidemic remained stable and labor market situations improved further, although the growth pace moderated somewhat as compared to the preceding month,” a government spokesperson said.

Sales in all retail categories rose 3% year on year to HKD 27.24 billion ($3.5 billion) but were down 21% from two years earlier.

The closure of borders to reduce the spread of Covid-19 has hit Hong Kong — a key luxury destination for tourists. Although the municipality has reduced its border restrictions, tourism has not yet returned to normal levels. The number of visitors was down 58% year on year in July and plummeted 99% for the first seven months of the year, according to the Hong Kong Tourism Board.

However, the government expects sales to pick up in August amid the launch of a consumption voucher scheme — a program to stimulate spending by offering citizens electronic vouchers worth HKD 5,000 ($644).

“The electronic vouchers that the government began to disburse in August have helped stimulate consumption sentiment and will render support to the retail business in the rest of the year,” the spokesperson explained. “Yet, it is essential for the community to keep the epidemic under control and strive towards more widespread vaccination, so as to strengthen the foundation for continued recovery of the retail sector and the overall economy.”

For the first seven months of 2021, sales of jewelry, watches, clocks and valuable gifts climbed 33% year on year to HKD 21.94 billion ($2.81 billion). Revenue from all retail segments increased 8% to HKD 201.6 billion ($25.87 billion).

Source: DCLA

Hong Kong Retail Sales Still Struggling to Recover

                             Hong Kong Retail

Hong Kong’s hard-luxury market saw its weakest growth figure for six months as the retail sector’s rebound ran out of steam amid a lack of tourism.

Revenue from jewelry, watches, clocks and valuable gifts grew 27% year on year to HKD 3.2 billion ($410.6 million) in July but was still 42% lower than in the same month of 2019, the municipality’s Census and Statistics Department reported Tuesday. The increase was also gentler than June’s 32% year-on-year growth and was the thinnest rise since January, when Hong Kong was struggling with a fourth coronavirus wave.

“Retail sales continued to increase in July over a year earlier as the local epidemic remained stable and labor market situations improved further, although the growth pace moderated somewhat as compared to the preceding month,” a government spokesperson said.

Sales in all retail categories rose 3% year on year to HKD 27.24 billion ($3.5 billion) but were down 21% from two years earlier.

The closure of borders to reduce the spread of Covid-19 has hit Hong Kong — a key luxury destination for tourists. Although the municipality has reduced its border restrictions, tourism has not yet returned to normal levels. The number of visitors was down 58% year on year in July and plummeted 99% for the first seven months of the year, according to the Hong Kong Tourism Board.

However, the government expects sales to pick up in August amid the launch of a consumption voucher scheme — a program to stimulate spending by offering citizens electronic vouchers worth HKD 5,000 ($644).

“The electronic vouchers that the government began to disburse in August have helped stimulate consumption sentiment and will render support to the retail business in the rest of the year,” the spokesperson explained. “Yet, it is essential for the community to keep the epidemic under control and strive towards more widespread vaccination, so as to strengthen the foundation for continued recovery of the retail sector and the overall economy.”

For the first seven months of 2021, sales of jewelry, watches, clocks and valuable gifts climbed 33% year on year to HKD 21.94 billion ($2.81 billion). Revenue from all retail segments increased 8% to HKD 201.6 billion ($25.87 billion).

Source: DCLA

Hong Kong Retail Falls to Record Low

Sales of jewelry and other luxury items in Hong Kong sank in August, marking the sharpest monthly decline on record as protests in the municipality hit tourism and consumption.

Revenue from jewelry, watches, clocks and other valuable gifts dropped 47% year on year to HKD 3.93 billion ($501.3 million) during the month, the municipality’s Census and Statistics Department reported Wednesday. That marks the lowest monthly decline for jewelry since the department began publishing results in 2005, according to a public data archive. Sales across all retail categories slipped 23% to HKD 29.36 billion ($3.74 billion).

Demonstrations against an extradition bill have been escalating since June, forcing luxury stores, train stations and the city’s airport to shut down. Although the bill has been scrapped, unrest has continued, with police reportedly shooting an 18-year-old protester Tuesday, and more than 100 people, including 30 police officers, being hospitalized amid the increased violence.

The situation has led to a sharp decline in travelers from China and abroad, as well as weakened local purchasing. The number of tourists visiting Hong Kong was down 39% to 3.6 million in August, the Hong Kong Tourism Board reported. Of those, 2.8 million came from mainland China, a decline of 42% over the same period last year.

The overall retail decline was “even worse than that recorded in September 1998 during the Asian financial crisis,” a government spokesperson noted. “Apart from the weak consumer sentiment amid subdued economic conditions, the plunge in August mainly reflected the severe disruptions to inbound tourism and consumption-related activities caused by the local social incidents.”

The government expects weakness in the market to continue as conditions persist, it explained.

“Retail sales will likely remain in the doldrums in the near term, as the worsened economic outlook and local protests involving violence continue to weigh on consumer sentiment and inbound tourism,” the spokesperson added.

Swiss bank UBS also expects a continued decline in the market, noting a more challenging outlook for hard luxury, which includes jewelry and watches, versus soft luxury, comprising bags, leather and clothing.

“This is particularly prevalent in the Chinese market, with hard luxury more exposed to recent [yuan] depreciation and protests in Hong Kong,” the bank explained. “Because of their long-term availability and high price tag, these are less likely to benefit from repatriation of demand in case of short-term disruptions in Hong Kong. Note that 50% of Chinese diamond jewelry was purchased in Hong Kong in 2018, [so] the near-term disruptions to sales [are] likely to be significant.”

In the first eight months of the year, retail sales of jewelry, watches, clocks and other valuable gifts decreased 14% to HKD 50.06 billion ($6.38 billion). Sales in all retail categories for the January-to-July period fell 6% to HKD 305.05 billion ($38.9 billion).

Source: DCLA

Hong Kong Retail Falls to Record Low

Sales of jewelry and other luxury items in Hong Kong sank in August, marking the sharpest monthly decline on record as protests in the municipality hit tourism and consumption.

Revenue from jewelry, watches, clocks and other valuable gifts dropped 47% year on year to HKD 3.93 billion ($501.3 million) during the month, the municipality’s Census and Statistics Department reported Wednesday. That marks the lowest monthly decline for jewelry since the department began publishing results in 2005, according to a public data archive. Sales across all retail categories slipped 23% to HKD 29.36 billion ($3.74 billion).

Demonstrations against an extradition bill have been escalating since June, forcing luxury stores, train stations and the city’s airport to shut down. Although the bill has been scrapped, unrest has continued, with police reportedly shooting an 18-year-old protester Tuesday, and more than 100 people, including 30 police officers, being hospitalized amid the increased violence.

The situation has led to a sharp decline in travelers from China and abroad, as well as weakened local purchasing. The number of tourists visiting Hong Kong was down 39% to 3.6 million in August, the Hong Kong Tourism Board reported. Of those, 2.8 million came from mainland China, a decline of 42% over the same period last year.

The overall retail decline was “even worse than that recorded in September 1998 during the Asian financial crisis,” a government spokesperson noted. “Apart from the weak consumer sentiment amid subdued economic conditions, the plunge in August mainly reflected the severe disruptions to inbound tourism and consumption-related activities caused by the local social incidents.”

The government expects weakness in the market to continue as conditions persist, it explained.

“Retail sales will likely remain in the doldrums in the near term, as the worsened economic outlook and local protests involving violence continue to weigh on consumer sentiment and inbound tourism,” the spokesperson added.

Swiss bank UBS also expects a continued decline in the market, noting a more challenging outlook for hard luxury, which includes jewelry and watches, versus soft luxury, comprising bags, leather and clothing.

“This is particularly prevalent in the Chinese market, with hard luxury more exposed to recent [yuan] depreciation and protests in Hong Kong,” the bank explained. “Because of their long-term availability and high price tag, these are less likely to benefit from repatriation of demand in case of short-term disruptions in Hong Kong. Note that 50% of Chinese diamond jewelry was purchased in Hong Kong in 2018, [so] the near-term disruptions to sales [are] likely to be significant.”

In the first eight months of the year, retail sales of jewelry, watches, clocks and other valuable gifts decreased 14% to HKD 50.06 billion ($6.38 billion). Sales in all retail categories for the January-to-July period fell 6% to HKD 305.05 billion ($38.9 billion).

Source: DCLA