A Chow Sang Sang store in Hong Kong
Two of Hong Kong’s major jewellers said Covid-19 continues to deal a heavy blow to the retail industry.
Tse Sui Luen Jewellery (International) Ltd recently issued a profit warning, stating that it expects to lose not less than HK$80 million (around US$10.32 million) during the current financial year ending March 31, 2020.
The company earned a profit of HK$54 million (around US$6.97 million) in the previous year.
Based on preliminary data, retail sales in February are seen to drop by approximately 88 per cent year on year, which is the worst turnover during the traditional peak season in retail, according to TSL.
“The coronavirus outbreak in January 2020 has taken a heavy toll on the retail industry, dealing a severe blow to the Hong Kong and China economies already hampered by the prolonged local social unrest in Hong Kong and escalated US-Sino trade tensions,” the company said.
Chow Sang Sang Holdings International Ltd, for its part, described the virus’s impact on its business as “alarming.”
According to the company, the first three weeks of 2020 was promising, owing to strong pre-Chinese New Year sales from China and improving social conditions in Hong Kong.
“Unfortunately, the positive trend was quickly derailed by the outbreak of Covid-19 in the last week of January,” noted Chow Sang Sang.
With governments ordering city-wide lockdowns and travel restrictions, the company temporarily closed 77 per cent of its mainland stores in the first two weeks of February.
Sales in China were down 45 per cent during the first two months of the year while those in Hong Kong and Macau dropped 44 per cent. By end-March, more than 95 per cent of its stores in China have reopened but with limited business hours, the group noted.
Chow Sang Sang also negotiated reduced rental fees with its landlords in February and March.
In 2019, Chow Sang Sang’s jewellery sales dipped 5 per cent while profits were down 36 per cent mainly due to a weak renminbi, the US-China trade tension and lacklustre tourist arrivals caused by the social unrest in Hong Kong.