Business of Nuance-Watson (HK), a retail venture between Zurich-based Nuance Group and AS Watson group at Hong Kong International Airport, has been seriously affected by the decline in air travellers, an executive said. The venture, trading under the name Horizons Duty Free, operates 25 outlets with a combined 40,000 sq ft of floor space at Chek Lap Kok. Managing director Alessandra Piovesana said the September 11 terrorist attacks led travel retail into turmoil at a time when trading conditions were already affected by the Asian economies. 'Tour groups disappeared and the Japanese took four months before making only a small re-appearance during the Chinese New Year,' she said. 'Worse, people lost the sense of prosperity and shoppers stopped feeling rich - something that is problematic with airport buying, which is largely motivated by impulse, self indulgence, price perception and gift giving.' The pinch was particularly felt for categories such as fashion, watches, perfume and cosmetics, she said. The company manages the duty free concession for general merchandise and perfume and cosmetics, as well as self-standing boutiques include Bvlgari, Bally and Hermes. She said business has been affected by the deterioration of Asian economies, in particular those nationalities that accounted for a substantial portion of Chek Lap Kok business, such as Taiwanese, Japanese and Hong Kong passengers. Both Taiwan and Japan underwent a series of economic downgrades, which started to become obvious by September 2000, she said. Hong Kong domestic demand suffered from persistent deflation and high unemployment resulting in sluggish consumption, she said. This had led domestic retailers to launch large discount campaigns, putting more pressure on airport sales.