Hong Kong jewelers shut stores in shopping areas amid protest
Hong Kong jewelry chains are shutting stores ahead of the lucrative Chinese national holidays after police wielding batons and using tear gas failed to end pro-democracy demonstrations.
Chow Sang Sang Holdings International Ltd., the city's second-largest jewelry chain, closed six outlets, including four in Mong Kok and two in Causeway Bay, Hong Kong's two busiest shopping districts, as protesters blocked major roads. Smaller rival Luk Fook Holdings International Ltd. also shut four locations in Mong Kok.
After police clashes with demonstrators continued into the early hours of the morning, thousands of people remained near the government's main offices in the Admiralty district, blocking one of the main roads into the central business area. While rallies that sprang up in shopping neighborhoods of Causeway Bay and Mong Kok were dwindling, workers said they would go on strike, and protesters pledged to return.
"It looks very bad on TV," Allan Zeman, chairman of bar and restaurant operator Lan Kwai Fong Holdings Ltd. said by phone today. "It will send a wrong message to the business community, tourists and even locals."
Chinese Tourists
Chow Sang Sang dropped as much as 3.8 percent to HK$18.90, headed for the biggest decline since Jan. 10, while Luk Fook plunged as much as 5.7 percent.
"We're already looking at retail sales declining during the golden week and this will make it even worse," Renee Tai, a Hong Kong-based analyst at UOB-Kay Hian Ltd. said by phone. "I won't be surprised if tourists from the mainland and elsewhere start canceling trips to Hong Kong."
Luk Fook's Hong Kong same-store sales, or revenue from shops open more than a year, will probably slump 20 percent to 30 percent during the week-long holiday that starts on Oct. 1, Chairman Wong Wai Sheung said in a phone interview.
Police roadblocks this morning left roadways in Central, the city's business district, deserted as people returned to offices by metro and on foot.
The benchmark Hang Seng Index slumped as much as 2.5 percent, the city's currency dropped to a six-month low and one- year interest-rate swaps climbed the most in 15 months.
Hong Kong retail sales numbers for August are due today, with a Bloomberg survey showing a median forecast for a 2 percent drop in value from a year earlier. Data over the weekend showed earnings at industrial companies in China declined last month for the first time in two years as a slowdown in the world's second-largest economy deepens.
"Mainland Chinese tourists are already spending less in Hong Kong," Dennis Lau, a director of sales operations at Chow Sang Sang, said in a phone interview today. "This will only rub salt into the wound."