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TSL Outlook ‘Gloomy’ Amid Hong Kong Slump

Nov 25, 2019 8:04 AM   By Rapaport News
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RAPAPORT... Hong Kong-based jeweler Tse Sui Luen (TSL) raised concerns about the impact of the Hong Kong protests on its business, as weak consumer sentiment dented sales.

“The weak local consumer sentiment as a result of citywide protests has made it challenging for retailers to operate,” the company said last week. “The situation was exacerbated by the significant drop in visitor arrivals, particularly tourists from mainland China. The hardship the local retail industry is facing is likely to persist, or even worsen, in the remainder of this financial year.”

Revenue fell 14% to HKD 1.65 billion ($211.1 million) in the first fiscal half ending September 30, the retailer reported. Sales in Hong Kong and Macau plunged 25% to HKD 537.1 million ($68.6 million), while revenue in mainland China dropped 7% to HKD 1.08 billion ($138 million).

The jewelry retailer recorded a loss of HKD 57.3 million ($7.3 million) , primarily due to the weakening of the Chinese yuan amid the ongoing US-China trade war, the company explained. However, the loss was less severe than the HKD 103.1 million ($13.2 million) it recorded for the corresponding period a year ago. 

“The global economy has been unfavorably impacted by the prolonged trade dispute between China and the United States, adversely affecting the general consumption sentiment,” TSL said. “The depreciation of the [yuan] has brought down the spending of mainland visitors and thus the group’s sales performance in Hong Kong, and has also shrunk our earnings from mainland China businesses in Hong Kong dollar terms.”

During the period, TSL opened three new stores in Hong Kong, noting it would likely cut down on store openings in the municipality for the remainder of the year. The company launched seven self-operated stores and 41 franchises in China during the six-month period.

Image: A TSL store in Hong Kong. (Mangochong)
Tags: Hong Kong protests, Rapaport News, Tse Sui Luen, TSL, US-China trade war
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