HONG KONG — A recovery for retailers here seems firmly within sight as sales figures posted for the month of September totaled 35.7 billion Hong Kong dollars, or $4.58 billion, an increase of 5.6 percent over the same month in 2016.
It marks the seventh consecutive month of positive growth in the city. Broken down by category, jewelry performed well, surging 14.7 percent year-over-year. The upward trend was also reflected in the earnings of Chow Tai Fook Jewelry Group, which on Oct. 18 posted a 12 percent rise in Hong Kong and Macau for the quarter ended Sept. 30.
The next best-performing category was cosmetics, growing 12.7 percent. Department stores saw a 9.4 percent increase in sales while gains in apparel and footwear were more modest at 1.7 percent and 1.2 percent, respectively. For the first nine months of 2017, sales grew 0.9 percent over the same period last year.
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“If we ask our members they are all positive about the fourth quarter,” said Thomson Cheng, chairman of the Hong Kong Retail Management Association, on Friday discussing the latest set of sales.
“We had a bad run through 2016 and early part of 2017 by Hong Kong standards,” Jonathan Cummings, chairman of consultancy Fitch in Hong Kong, said. “But I think across the board it was an adjustment rather than a major fall. Retail numbers were slightly overinflated if we go back a couple of years, particularly with mainland Chinese tourism in certain sectors. It has been really an economic and demographic adjustment.”
According to a survey conducted over the summer by Jones Lang Lasalle, 82 percent of mall landlords have seen improved performance in their properties this year and 91 percent of these believe the market will continue to improve in 2018.
“Overall sentiment has really improved in the market and whilst some luxury retailers have decided to reduce their exposure on the streets, the spaces have generally been quickly filled by more mass-market and affordable luxury brands,” said James Assersohn, director of retail for Asia-Pacific at the property brokerage. “This is a positive thing for the overall market as it is creating a more exciting and varied shopping environment for the customers on the street.
“Rents have pretty much bottomed out after dropping on average 41 percent in the major markets and most brands who were paying rents over market value have their leases coming to an end and are able to negotiate to appropriate market rents with the landlords. This is creating a far healthier environment for street retail and most retailers now are deciding to stay in the current locations rather than close,” Assersohn said.