Months after Hong Kong protests, luxury fashion houses are feeling the hit
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Version 0 of 1. Prada is the latest luxury brand to report sliding profits as international fashion houses find that Hong Kong’s pro-democracy protests, or the ‘umbrella revolution’, weighed on 2014 results. Prada suffered a 28 per cent fall in net profit last year following a 5.5 per cent drop in sales in Asia, excluding Japan. The luxury brand said that poor sales in Hong Kong and Macau in the second half of the year was the main reason for this. Shops in central Hong Kong suffered for two months in the last quarter of 2014 after pro-democracy sit-ins, dubbed the ‘umbrella revolution’, shut off access to shoppers and tourists. Prada said that the geopolitical and monetary environment was more uncertain than they had expected. “This situation has temporarily held up the group's path of growth but it will not affect our medium/long-term growth objectives,” said Patrizio Bertelli, ceo. Prada said that the geopolitical and monetary environment was more uncertain than they had expected Protests put off visitors from abroad and from mainland China, contributing to falling January retail sales 14.6 per cent lower than a year earlier. This was the worst showing since Hong Kong was hit by the SARS virus in 2003. Sales of jewellery, watches, clocks and valuable gifts slid 21.4 per cent. Slowing growth in China and a change in consumer spending habits is also to blame, according to Paul Tang, Bank of East Asia chief economist. He said that weaker spending power among mainland visitors is seen as the main reason for the weak data, while recent protests also hurt the shopping mood among mainland tourists. Hong Kong has become a travel desination for middle-class Chinese travellers looking for household goods, while China’s super-rich are travelling to more exotic spots, taking their luxury spending money with them. |