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.
Supermodel @helenachristensen teamed up with longtime friend and designer @camillastaerk on a joint @paredeyewear collaboration. The lineup features three styles and 11 offerings, all of which embody a vintage feel. Get all the details on how they celebrated the collab on WWD.com. #wwdaccessories #wwdeye (📷: @slovekinpics)
“It’s a hard industry to keep motivated, as well, so finding different subjects and people is what makes it worth it – when you’re like, oh, I’ve met great people, I feel like I’ve done something good, and I feel proud of having done this,” said French actress Stacy Martin on being grateful for the variety of roles she’s take on. Read @ktauer’s full interview with Martin on her her latest film “Godard Mon Amour.” #wwdeye (📷: @danieldorsa)
After showing in front of the Eiffel Tower for his last two women’s ready-to-wear collection, it looks like @anthonyvaccarello may be heading to the Big Apple. Sources say the designer will stage his next @ysl show in NYC on June 6. Get all the details on WWD.com. #wwdnews #wwdfashion (📷: @aitorrosasphoto)
EXCLUSIVE: Two and half months after John Targon, cofounder and codesigner of Baja East, was hired as creative director of the contemporary division at Marc Jacobs, he has left the company, WWD has learned. Marc Jacobs International, which is owned by LVMH Moët Hennessy Louis Vuitton, confirmed Targon’s departure in a statement: “John Targon is a talented designer and we appreciate the work he has done here. Ultimately working together did not make sense for the brand and we wish him the best.” Read the story by @jessiredale, link in bio. #wwdnews
@theluxurycollection is officially launching a collection, tapping Sofia Sanchez de Betak for the capsule. Over 30 styles will be featured in the Chufy x The Luxury Collection, debuting next month at Bergdorf Goodman, The Webster, FiveStory and more. De Betak, known as “@chufy,” drew inspiration for the collection from her trips to Japan in the past year #wwdfashion
@lhd, founder and CEO of @thewebster, has teamed up with @lebonmarcherivegauche for the European launch of her ready-to-wear line, LHD. The launch will come with an exclusive pop-up opening today that’s set to run through May 20. Located on the second floor, it carries her debut Miami-themed resort collection, launched in November as see-now-buy-now. #wwdfashion