SLOW MOTION: The Hong Kong Trade Development Council revised downward its forecast for export growth. The TDC’s chief economist Edward Leung said that he expects only 3.3 percent growth in the last quarter of the year, down from the 4 percent growth previously forecast. Leung said, “Resumption of traveling by overseas buyers, coupled with the renewed marketing efforts of Hong Kong suppliers, should bode well for Hong Kong exports. But the repercussion of SARS is expected to linger on for a while, and exports will likely pick up strongly only towards the last quarter of 2003.”
This story first appeared in the June 3, 2003 issue of WWD. Subscribe Today.
While the clothing industry appears to be the least hard hit, Hong Kong’s jewelry and watchmakers were dealt a serious blow by SARS as the outbreak coincided with the industry’s buying season. To recoup some of the losses, the TDC announced last week that it was suing the Swiss organizers of the Basel Watch and Jewelry Fair for $9 million in damages. The money would compensate the TDC and the 313 Hong Kong companies that were not allowed to participate in the April show. The TDC alone spent $3.7 million on Baselworld. Analysts say that so far this year, the industry has lost orders worth an estimated $1.3 million. An official of the Basel fair in New York said, “The Basel show is in discussions with the Swiss government on how to approach the next step and resolve this important issue. There’s a meeting this week and there is no new development until this meeting.” — Constance Haisma-Kwok
SARS SAFETY: The Association of Perfumes and Cosmetics Distribution in Singapore is starting a “We’re Cool. We Care” campaign around the end of the May department store sales period. During the campaign, all beauty consultants at department store cosmetic counters who pass a daily temperature check are to wear a specially designed badge with a smiling flower design. Adding to the standard customer contact procedures issued previously to fight SARS, Takafumi Oba, president of APCD, said the “We’re Cool. We Care” campaign is the next step by APCD to keep fighting the epidemic.
“The SARS situation might seem to be in control now. However, it’s not over yet and we would want to incorporate customer care and customer safety in our day-to-day routine until the case is over,” said Oba.
The association’s current customer contact procedures include a twice-daily temperature check, the use of hand sanitizers before and after serving customers and wiping the counter with disinfectant every hour. Also, all cosmetic counters are using only disposable cosmetic applicators for product testing.
In addition, the APCD has ordered handheld thermal scanners for all cosmetic houses to use at their key counters, the first in the department store sector. The handheld scanners cost about $200 each and there’s an order of about 180 pieces from all APCD members. The scanner enables a person’s temperature to be taken without any body contact using infrared rays. They will be in use at all key cosmetic counters in mid-June. — Koji Hirano
POLYESTER DIP: The slowdown in Asia’s textile production, coupled with higher polyester prices and the SARS epidemic, have resulted in a sharp decline in sales of South Korea’s textured polyester yarns. Yarn sales were down nearly 15 percent in volume in the first four months of the year. Exports to the U.S. fell 50 percent alone in the first quarter.
The impact of SARS was evident when exports to China fell off dramatically in March after being up in January and February. And Korean exports of polyester yarn to Hong Kong were virtually nonexistent in April. Another factor has been the price of polyester, which surged at the beginning of the year from $2.50 per kilo in January to $2.62 in February. In April, the price was $2.18. — C.H.K.
WEAKENING CHAINS: Total sales of chain stores in Japan dropped 2.6 percent to $10.2 billion in April from a year ago, according to the Japan Chain Stores Association. Due to lower-than-normal temperatures and rain at the beginning of the month, apparel sales dropped 5.2 percent from April 2002, the association said. Apparel sales accounted for 13.8 percent of all revenues of the country’s 8,798 chain stores. Sales of women’s wear dropped 3.4 percent, while men’s wear dropped 5.7 percent. Dollar figures are converted at current exchange rates. — K.H.
COME VISIT: Now that SARS seems to be under control, the question on everyone’s lips is how to get tourists to come back to Hong Kong. To that end, the Hong Kong government announced a $128.2 million package that promotes the city and provides incentives for travelers.
Although details have not been confirmed, The South China Morning Post reported that the plan calls for visits to Hong Kong by high-profile luminaries from the worlds of politics, sports and entertainment. Among those said to be on the invite list are former U.S. President Bill Clinton, former mayor of New York City Rudolph Giuliani, Latin heartthrob Ricky Martin and rock group The Rolling Stones. The latter was scheduled to play numerous concerts in Hong Kong and China in April, but canceled because of SARS fears. Famed English soccer club Liverpool also will travel to Hong Kong for a friendly match.
The spending package calls for heavy advertising, visits abroad by prominent Hong Kong medical, business and political leaders and numerous community events, including street fairs and performances, designed to entice locals back to shops and restaurants.
Plans also were revealed for a walk of fame akin to that of Hollywood. To be located in Tsimshatsui, Hong Kong’s premier tourism district, the Avenue of Stars will honor local film industry luminaries, as well as international stars who have made a significant contribution to local moviemaking. The project will cost $5.1 million and will get under way next month. Tourists can expect to view the sidewalk in April 2004, when the hand prints and signatures of such Hong Kong stars as Jackie Chan, Chow Yun-fat, Jet Li and director John Woo — to name a few shoo-ins — are expected to be unveiled. — C.H.K.