TSL Outlook 'Gloomy' Amid Hong Kong Downturn

RAPAPORT... Hong Kong-based jeweler Tse Sui Luen (TSL) raised concerns about theimpact of the Hong Kong protests on its business, as weak consumer sentimentdented sales. "The weak local consumer sentiment as a result of citywideprotests has made it challenging for retailers to operate," the company saidlast week. "The situation was exacerbated by the significant drop in visitorarrivals, particularly tourists from mainland China. The hardship the localretail industry is facing is likely to persist, or even worsen, in the remainderof this financial year." Revenue fell 14% to HKD 1.65 billion ($211.1 million) in thefirst fiscal half ending September 30, the retailer reported. Sales in HongKong and Macau plunged 25% to HKD 537.1 million ($68.6 million), while revenuein mainland China dropped 7% to HKD 1.08 billion ($138 million). The jewelry retailer recorded a loss of HKD 57.3 million($7.3 million) , primarily due to the weakening of the Chinese yuan amid the ongoing US-China trade war, the company explained. However, the loss was less severe than the HKD 103.1 million ($13.2 million) it recorded for the corresponding period a yearago.  "The global economy has been unfavorably impacted by theprolonged trade dispute between China and the United States, adverselyaffecting the general consumption sentiment," TSL said. "The depreciation ofthe [yuan] has brought down the spending of mainland visitors and thus thegroup's sales performance in Hong Kong, and has also shrunk our earnings frommainland China businesses in Hong Kong dollar terms." During the period, TSL opened three new stores in Hong Kong,noting it would likely cut down on store openings in the municipality for theremainder of the year. The company launched seven self-operated stores and 41franchises in China during the six-month period. Image: A TSL store in Hong Kong. (Mangochong)