Fortress, the consumer electronics and home appliances business of Hutchison Whampoa, said it had not lost its appetite for expansion, although its priorities were to create demand and to control costs in the face of the economic downturn. 'We didn't change our strategy to expand and we are still looking into expanding now, as the lease terms seem better,' said managing director Gary Ng Wang-yu. The retailer, which has 50 outlets in Hong Kong and Macau, plans to open two more stores this month. Mr Ng said that in the near term, Fortress would focus on providing cheaper products and better service to lure customers, whose desire to buy had waned as many companies laid off employees. 'The impact of negative news surfaced at the end of the fourth quarter because of the layoffs, rather than during the third quarter, when some small to medium-sized companies collapsed,' he said. Fortress recorded a single-digit drop in sales revenue in November, which was 'expected' by the management. Hong Kong's retail sales in October shrank the most since January 2007 as consumers controlled their spending. By value, sales totalled about HK$20.8 billion, up 0.3 per cent year on year. By volume, sales fell 4.3 per cent, government data shows. In September, retail sales rose 7 per cent in value and 1.9 per cent by volume. A government spokesman said retail sales would probably continue to suffer. Mr Ng said a new trend was that customers were more willing to shop at reputable retailers, possibly prompting smaller companies to wind up and thus opening up more business opportunities for Fortress. 'The support and reputation of our group [Hutchison Whampoa] definitely gives our customers confidence,' he said. Tai Lin Radio Service, a smaller rival and one of Hong Kong's oldest appliance chains, closed down in October last year under the weight of a HK$100 million debt. The closure of the 62-year-old business was partly caused by a lack of cash flow amid the credit crunch. But the retailer had also been burdened by overexpansion in recent years. Mr Ng said Fortress would not bail out its rival as the two firms were positioned differently in the marketplace. Instead, it would rely on organic growth in stores to expand. Fortress had no plans to lay off staff at the moment, he said.
