Hong Kong Sales Drop Significantly

RAPAPORT... Sales of jewelry and other luxury items in Hong Kong plummetedin September as ongoing protests and unrest in the municipality hit tourism andconsumption. Revenue from jewelry, watches, clocks and other valuablegifts dropped 41% year on year to HKD 3.63 billion ($463.6 million) during themonth, the municipality's Census and Statistics Department reported Friday.That result was only a slight improvement on last month's 47% drop, the largestmonthly decline for jewelry since the department began publishing results in2005. Sales across all retail categories slipped 18% to HKD 29.87 billion($3.81 billion). Pro-democracy demonstrations have beenescalating since June, hindering business at luxury stores, depressing inboundtourism and weakening local spending. The number of tourists visiting Hong Kongwas down 34% to 3.1 million in September, the Hong Kong Tourism Board reported.Of those, 2.4 million came from mainland China, a decline of 35% over the sameperiod last year. Hong Kong slipped into recession as the unrest caused the economy to slow in the third quarter, said Paul Chan, the municipality's financial secretary.  In the first nine months of the year, retail sales ofjewelry, watches, clocks and other valuable gifts slid 17% to HKD 53.71 billion($6.85 billion). Sales in all retail categories for the January-to-Septemberperiod fell 7% to HKD 334.96 billion ($42.74 billion). By volume, the overall retail decline for the nine-monthperiod hit a near-record low. "Retail sales saw another month of significant year-on-yeardecline in September, as the local social incidents continued to take a heavytoll on inbound tourism and consumption-related activities," a governmentspokesperson noted. "For the third quarter as a whole, retail sales volume fellby 19.5% year on year, almost on par with the record decline in the thirdquarter of 1998." The government expects weakness in the market to continue asconditions persist, it explained. "As protests involving violence continue to deter touristsand reduce local consumption, and the subdued economic outlook also dampensconsumer sentiment, the performance of retail sales is likely to stay weak inthe near term," the spokesperson added. Image: Hong Kong harbor. (Shutterstock)