HONG KONG (Bloomberg) — Hang Lung Properties Ltd., which earns more than half of its rental profit from its China malls and offices, said a recovery in Hong Kong retail sales depends a change in negative attitude toward mainland visitors.
“Retail sales definitely haven’t peaked,” Ronnie Chan, chairman of the Hong Kong-based company, said in an interview today. “There are still a lot of mainland customers coming here. The problem is whether you welcome them or not. It’s definitely a big factor.”
Hong Kong’s retail sales dropped for five straight months since February amid a slowdown in visitor arrivals from the mainland, as China’s economic growth moderated, and a decline in demand for big-ticket items such as jewelry and watches. Chief Executive Leung Chun-ying in May said he’s considering limiting arrivals from across the border as tensions rise between local residents and mainland Chinese tourists, the biggest group of visitors to the city.
“I’m not too worried,” Chan said. “When jobs are affected, people will change.”
The impact of the negative sentiment on the city’s retail sector is greater than that of China’s crackdown on corruption, Chan said. The anti-graft campaign, which has hit demand for luxury goods in China, is “not that big a part in Hong Kong,” he said.
Hang Lung share have declined 3.3 percent this year, compared with a 5.8 percent gain in the benchmark Hang Seng Index.
Retail sales fell 6.9 percent in June from a year earlier to HK$37.1 billion ($4.8 billion), the government said yesterday. Growth in mainland visitors slowed to 8 percent that month, compared with the 20 percent year-on-year gain in the first quarter, according to the city’s tourism board.
“We currently do not see resumption of stronger spending power in the mainland visitors coming to Hong Kong,” Barclays Plc analysts led by Phoebe Tse said in a report yesterday. “Any government policies that limit the growth of mainland visitor arrivals remains a negative risk.”
Hang Lung said yesterday its rental income in Hong Kong rose 7 percent in the first half to HK$1.6 billion and its rental profit in China gained 14 percent to HK$1.9 billion.
In Hong Kong, about half of the company’s properties are retail, including two shopping centers in the Causeway Bay district, one of the most expensive precincts for retail rents in the world. It operates seven malls in China and is opening one more in Tianjin in September.
Its properties in Hong Kong and Shanghai will continue to see steady rental growth in the second half, the company said in a statement yesterday.
Donatella Versace will receive the International Award at the 2018 @cfda awards, which were announced tonight. Tap link in bio for a list of all the nominees and honorees. #wwdnews #wwdfashion (📷: @rahirezvanistudio )
The 2018 @cfda Awards nominees are out! @virgilabloh for @off____white for is nominated for Womenswear Designer of the Year. Tap link in bio for all the nominees. #wwdnews #wwdfashion ( 📷: @simonelezzi)
@chanelofficial is suing high-end vintage retailer @whatgoesaroundnyc for trademark infringement, a move that could cost the retailer millions. The French fashion house claims that it’s not only unintentionally sold counterfeit goods on occasion, but that it’s “gone out of its way to create an association with Chanel,” which does not exist. Read Chanel’s statement on WWD.com #wwdnews (@aitorrosasphoto)
Exclusive: Guillaume Henry has left @ninaricci, the fashion house said on Thursday. “After three years of mutually gratifying creative collaboration, Nina Ricci and Guillaume Henry have together decided that the designer will depart the house after the presentation of the fall-winter 2018-19 collection,” Ricci said in a statement. Get all the details on WWD.com #wwdfashion (📷: @aitorrosasphoto)
“When Bella enters a room all heads turn,” said @peterphilipsmakeup, creative and image director for @diormakeup. Last night, the two celebrated the product launch of Dior’s Lacquer Plump in Los Angeles with other celebs like @parisjackson, @winnieharlow and more. Head to WWD.com to see the rest of the photos from the night (📷: @chelsealaurenla) #wwdeye
“These shirts are an art form, it’s about getting the message out to as many people as you can. It breaks down the pretentiousness of the art gallery,” says Kumasi Sadiki, cofounder of @ebayontheblock, a store that sells merchandise by New York artists who are shifting their attention to clothes as a wearable medium. Pictured here is a design by artist @joegarvey_, one of the first to spearhead this movement. Head to WWD.com to read @mistywhitesidell full story on how their designs have become merch for the underground elite #wwdfashion
@netaporter is dedicating a part of its website – called the Fine Jewelry and Watch Destination – to highlight its high-end jewelry. The hub will feature products on the site, as well as incorporate styling advice and educational content about high-priced jewelry items. Get more details on WWD.com. #wwdaccessories
For “The Cher Show,” an upcoming musical based on @cher’s life and career, @bobmackie is once again collaborating with the singer in designing the costumes. For decades, Mackie has designed glitzy stage costumes and red carpet looks for the 71-year-old Grammy winner. Pictured here is a sketch of some of the pieces in the wardrobe of the musical, which is set to debut in Chicago on June 12 before making its way to Broadway #wwdeye