SHANGHAI — Too little, too late.
Hong Kong’s long-suffering retail sector is forecast to lose 10,400 jobs with at least 5,200 stores shutting before summer, said the Hong Kong Retail Management Association, as both public and private relief measures prove inadequate to stem the pain from the coronavirus and months of political protests.
The survey released by the industry group on Thursday showed that 40 percent of retailers said they would not be able survive past another four months under current conditions, with 96 percent reporting they had sustained financial losses in the last year.
Conducted between March 31 and April 9, the survey gathered feedback from 152 of the HKRMA’s member retailers. In total, the respondents represented 3,345 stores, which employ 59,073 people — or 23 percent of the 260,000 retail industry workers in Hong Kong.
An expected 5,200 layoffs are to come between February and April, and in the month of May alone, the job cuts will accelerate to claim another 5,200 positions.
As for stores — not including those that have already gone out of business — at least 2,000 are predicted to shut between February and April, and another 3,200 more in the month of May. If current conditions persist throughout the year, between May and August a further 6,600 stores will close, and between September to December another 8,600.
More than half of the companies reported that landlord rental concessions were the top most helpful measure, followed by government financial assistance. While the city’s authorities had unveiled a monetary relief fund and other measures to support businesses, HKRMA chairwoman Annie Yau Tse said those benefits are expected to be disbursed sometime around June, which would be too late to help a large number of companies in the sector.
At the same time, private relief measures are falling short, with 84 percent surveyed saying that landlords are not lowering rent deeply enough or for long enough. Retailers in malls reported that on average they received 20 to 50 percent of rental relief for a period of one to three months. For street-front tenancies, the concessions on average were 10 to 30 percent for two to five months.
Tse urged landlords to give out at least half a year of rent at a 75 percent discount or to pro-rata the rent on the tenant’s turnover.
Meanwhile, Hong Kong newspaper Apple Daily reported that Lane Crawford Joyce Group staff have been told today that they would see salary cuts of between 8 and 18 percent for a period of 11 months, with senior executives seeing cuts of 20 to 50 percent. All bonuses and raises for the year have been canceled.
According to Apple Daily, Lane Crawford Joyce president Jennifer Woo said in an internal memo that the recent quarter was the company’s worst on record, with disruption to business worse than SARS and the 2008 global financial crisis combined.