HK protests hurting sales of luxury goods: Bain
PARIS/MILAN: Luxury brands are likely to retreat from Hong Kong as the city is wracked by protests at a time when wealthy Chinese shoppers are staying on the mainland, consultancy Bain said yesterday, highlighting a shift that is reshaping the industry.
Sales growth for companies making goods like jewellery, high-end fashion or handbags would come in at the low end of its expectations this year due to the Hong Kong turmoil, according to Bain, which produces closely-followed forecasts for the sector.
The Hong Kong pro-democracy protests weighed on third-quarter sales growth at companies ranging from Cartier owner Richemont to Germany's Hugo Boss, as the flow of visitors dwindled and retailers closed shop temporarily.
Luxury brands, which have around 1,000 stores in the Asian shopping hub, are likely to start shutting some permanently, Bain said.
Luxury sales in Hong Kong, which hit a peak of €10 billion (S$15 billion) in 2013, are likely to drop to €6 billion this year, Bain said.
This would mean the city that once accounted for around 5 per cent of global sales is now closer to 2 per cent.
And while the demonstrations might be a temporary disruption, a more structural shift is at play in the shopping habits of well-off customers from the Chinese mainland.
Chinese shoppers now make up 35 per cent of all industry sales.
And they are on course to account for 90 per cent of growth in the market this year, Bain said. - REUTERS