Retail stocks fall after Lunar New Year sales dip
Chow Tai Fook Jewellery shares down 4.22 per cent
Shares of retailers selling jewellery and cosmetics fell on Thursday after reports of disappointing sales during the Lunar New Year, with an analyst’s report saying larger neighbourhood malls saw more shoppers than small ones during the holiday.
Chow Tai Fook Jewellery shares lost 4.22 per cent to close at HK$4.53 on Thursday after it reported a 29 per cent drop in sales during the holiday week and luxury watch retailer Hengdeli fell 3.84 per cent to close at 75 HK cents after it issued a profit warning.
Hengdeli said in a filing to the stock exchange on Wednesday it expected profit attributable to its equity shareholders for the financial year to the end of December last year would be down 70 per cent year on year.
Sa Sa International shares dropped 0.43 per cent at one stage before bouncing back to HK$2.31, their closing level on Wednesday, when it announced a 20 per cent decline in sales during the Lunar New Year due to a 26 per cent drop in sales to mainland tourists.
It said the number of transactions attributed to mainland tourists decreased 18 per cent, while their average bill per transaction fell by 9 per cent.
“This showed a further deterioration from the third quarter [for Sa Sa] as the Chinese tourist arrivals widened to a double digit decline during the period,” Bocom International said.
It said the Mong Kok riots would worsen an already sluggish retail market.
The continued downtrend of Chinese tourist arrivals and spending, meant Sa Sa margins could be squeezed, Bocom said, because it needed to offer discounts to drum up sales.
“We believe it is still too early to expect a bottom-out on Sa Sa,” it said.
Credit Suisse said it had visited nine shopping malls during the Lunar New Year, with the majority of them being quieter than on weekends.
They were: Harbour City in Tsim Sha Tsui , Times Square , Hysan Place and Sogo in Causeway Bay, Langham Mall and MOKO in Mong Kok, Sha Tin New Town Plaza in Sha Tin, Yoho Mall in Yuen Long and Landmark North in Sheung Shui.
It listed five key observations from its mall checks: there were queues for very few brands and the queues were short; restaurants and midmarket shops saw better footfall, with cosmetics counters still relatively more popular; no long queues at cash counters were seen, nor were there many shopping bags despite many retailers offering discounts; there was not much competition for the best spots to shoot photos of decorations; and larger neighbourhood malls saw stronger footfall than smaller ones.
However, Sun Hung Kai Properties reported that 12 malls catering to local residents registered strong sales during the holiday week.
Maureen Fung Sau-yim, a director of subsidiary Sun Hung Kai Development (China), said retail sales at 12 SHKP malls grew 9 per cent to HK$480 million from February 3 to 14 compared with the holiday week last year.
“The era of easy money in the retail industry has come to end,” she said. “Looking ahead, we have to work harder to cope with the market change” from a stronger Hong Kong dollar and fewer mainland tourists.