Retailers bare unexpectedly lower sales during Golden Week

Watch and jewellery categories were most hit.

Most Hong Kong retailers posted lower-than-expected sales during Golden Week, as per the Honk Kong Retail Management Association, with watch and jewellery categories seeing the most serious hit.

According to a research note from Nomura, the Association’s survey also pointed out that the sales at watch and jewellery retailers plummeted 30-50% y-y in the disrupted areas (Admiralty/Central/Causeway Bay/Mongkok) during the first five days of the week.

This, despite the number of mainland tourist arrivals to HK rising ~2% y-y, the report noted.

Chow Sang Sang management said the company posted a mid-single-digit decline y-y in overall sales during the week, despite Macau sales growing 10% y-y, as reported by Now News.

Here’s more from Nomura:

China posted low teens retail sales growth in Golden Week. In China, retail sales and catering grew 12.1% y-y during Golden Week (October 1-7), according to the data compiled by the Ministry of Commerce.

The ministry’s announcement also highlighted robust growth (double-digits) in categories including apparel, jewellery, household electrics, mass-market dining and vehicles.

However, the growth pace is actually lower compared to previous years.

Chow Tai Fook will release its 2QFY15 (July-Sept) sales updates in mid-October and Luk Fook will do so on 15 October.

They may give more colour regarding their performance during Golden Week in their announcements.

We remain cautious on the sector and are reviewing our estimates for the three HK jewellers, Chow Sang Sang, Luk Fook.