Hong Kong Luxury Sales Rebound on Confidence in Mainland
Hong Kong’s luxury sales rebounded in a sign that confidence is returning to a Chinese economy that probably picked up pace in the final three months of last year after a seven-quarter slowdown.
Sales of goods including jewelry and watches jumped 13.7 percent in November from a year earlier after a 2.9 percent decline in October, Hong Kong’s government said in a statement on its website yesterday.
The role of mainland tourists in driving the city’s retail sales makes the figures one gauge of sentiment in the world’s second-biggest economy. Infrastructure projects and an expansion of credit through so-called shadow banking are supporting growth in China as Xi Jinping cements his leadership after becoming head of the Communist Party in November.
“China’s economic data in the past few months have improved and this is supporting luxury sales here,” said Lily Lo, a Hong Kong-based economist at DBS Group Holdings Ltd., Southeast Asia’s biggest lender. “The rebound in luxury sales will be sustainable, although we’re unlikely to see the 30 percent or 40 percent growth of the past.”
Emperor Watch & Jewellery gained 4.9 percent to HK$1.08 as of the midday break in trading. Hengdeli Holdings Ltd. (3389), the Chinese partner of Swatch Group AG (UHR), rose 2.4 percent to HK$3.03. Sa Sa International Holdings Ltd. (178), Hong Kong’s biggest cosmetics retail chain, increased 1.1 percent to HK$6.59.
Those gains compared with a 0.8 percent decline for the benchmark Hang Seng Index.
Tourist Surge
In November, visitor arrivals from mainland China jumped to more than 3 million, an increase of 30 percent from a year earlier. The city’s total retail sales rose 9.5 percent from a year earlier, the biggest gain in five months and more than any of seven analysts forecast in a Bloomberg News survey with a median of 4.2 percent.
Some luxury companies have been betting that Chinese shoppers will loosen their purse strings after the leadership change, which began in November and will be completed at a meeting of the National People’s Congress in March.
The transition will clear uncertainty about political appointees and economic policy, and encourage the giving of business gifts, Kent Wong, managing director at the world’s largest jeweler, Chow Tai Fook Jewellery Group Ltd. (1929), said late last year. At the same time, the Communist Party under Xi has said that it wants to discourage official extravagance.
Wage Growth
In Hong Kong, strength in sales “can be traced back to more active spending by both mainland visitors and local households,” said Donna Kwok, a Hong Kong-based economist at HSBC Holdings Plc. “China’s ongoing recovery, more stable financial market conditions, sturdy job market conditions and robust wage growth have all played a part.”
Kwok said that a Chinese recovery may help the value of Hong Kong retail sales to increase an average 15 percent to 16 percent this year. China’s gross domestic product is poised to expand 8.1 percent this year, up from 7.7 percent in 2012, according to the median estimate of economists surveyed last month by Bloomberg News.
Chinese consumers have overtaken U.S. shoppers this year to become the world’s biggest buyers of luxury goods, accounting for 25 percent of global sales through purchases at home and overseas, consultant Bain & Co. said.
U.S. consumers now account for one-fifth of the world’s luxury sales, followed by the Japanese shoppers at 14 percent, according to a report released by Bain last month.
To contact the reporter on this story: Stephanie Tong in Hong Kong at stong17@bloomberg.net
To contact the editor responsible for this story: Chitra Somayaji at csomayaji@bloomberg.net
Oct. 11 (Bloomberg) -- Erwan Rambourg, managing director and head of consumer and retail global research at HSBC Securities Asia Ltd., discusses the outlook for luxury brands such as Hermes International, Chanel SA and Bottega Veneta. He speaks from Hong Kong with Guy Johnson on Bloomberg Television's "The Pulse." (Source: Bloomberg)
Nov. 26 (Bloomberg) -- As Dracula he shunned the light, though in real life Hungarian actor Bela Lugosi owned a pair of 18th-century Chinese lantern stands that will go on sale at Christie’s International in Hong Kong. The six-day auction of wine, modern and contemporary Asian Art, classical Chinese paintings and calligraphy, ceramics, Chinese furniture, watches and jewelry began Nov. 23 and is estimated by Christie’s to raise as much as HK$2.2 billion ($284 million). (Source: Bloomberg)
Fashion Tory Burch, 46, owns 28.3 percent of New York-based Tory Burch LLC. Photographer: Stephen Lovekin/Getty Images
Fashion designer Tory Burch sits for a photograph during the opening of Tory Burch's West Coast store, Tory by TRB, on May 19, 2005 in Los Angeles. Photographer: Marsaili McGrath/Getty Images
Tory Burch Becomes Billionaire as Ex-Husband Sells Fashion Stake
Slaven Vlasic/Getty Images for Mercedes-Benz Fashion Week
Models walk the runway during the Tory Burch Spring 2013 fashion show in New York.
Models walk the runway during the Tory Burch Spring 2013 fashion show in New York. Photographer: Slaven Vlasic/Getty Images for Mercedes-Benz Fashion Week
Tory Burch Becomes Billionaire as Ex-Husband Sells Fashion Stake
Daniel Acker/Bloomberg
New York-based Tory Burch LLC sells high-end women’s clothing and accessories, including popular ballet flat shoes adorned with the company’s double-T logo.
New York-based Tory Burch LLC sells high-end women’s clothing and accessories, including popular ballet flat shoes adorned with the company’s double-T logo. Photographer: Daniel Acker/Bloomberg
Michael Kors, chief creative officer of Michael Kors Holdings Ltd., rings the opening bell at the New York Stock Exchange (NYSE) in New York. Michael Kors Holdings Ltd. stock was up 87.3 percent during 2012. Photographer: Peter Foley/Bloomberg
Rate this Page
Bloomberg moderates all comments. Comments that are abusive or off-topic will not be posted to the site. Excessively long comments may be moderated as well. Bloomberg cannot facilitate requests to remove comments or explain individual moderation decisions.