Luxury goods join Hong Kong retail slump as protests bite

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Luxury brand Richemont is the latest firm to report a hit to business over ongoing protests in Hong Kong.

The Swiss company said political unrest in Hong Kong, a key market for its watches, has knocked sales.

Retailers in the territory forecast a sharp sales drop this year due to the protests, while tourism is also suffering.

Demonstrators have filled Hong Kong’s streets over the past month with more protests expected this weekend.

The demonstrations were sparked by a proposed extradition bill which would allow people to be sent to China for trial.

But they now reflect broader demands for democratic reform and concern tha Hong Kong’s freedoms are being eroded.

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The sometimes violent clashes have disrupted business in the city, a hub for wealthy Asia shoppers.

Unrest has forced many stores to close and sparked widespread trading disruption.

In a statement on Thursday, Richemont said sales in the Asia-Pacific rose in the three months to June with the exception of Hong Kong, where sales sank due to the recent street protests and the strength of the local dollar.

This week the Hong Kong Retail Management Association (HKRMA) said most members had seen sales fall during in the past month, and forecast more pain to come.

“The unexpected store closures due to the protests not only led to sales loss, but also directly affected retail staff’s take-home income, especially part-time staff and those paid on a commission basis,” the HKRMA said in a statement.

The group said July and August are peak business seasons retailers and as protests continue and spread, “our members forecast a drop by double digit in the next months”.

Tourism operators have also voiced their concerns.

The Hong Kong Federation of Unions said the number of tour groups from mainland China has declined to 5,641 in June from a monthly average of 7,800 at the beginning of the year, according to reports.

The group also said hotel occupancy rates were down as much as 20% in June from a month earlier, and forecast rates could drop 40% this month on the prior year.

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