HONG KONG (Nikkei Markets) -- An industry body representing retailers in Hong Kong on Monday warned of shop closures and staff layoffs in the coming months, saying that as many as 97% of its members were making losses now.
The Hong Kong Retail Management Association represents some 63,000 establishments, a majority of which are small- and medium-sized enterprises.
It said a survey it conducted of 176 companies over Oct. 29 and Nov. 22 showed around 30% of respondents planned to reduce head count by around 10% over the coming six months. About 11% intend to shutter shops over the same period. These companies together operate 4,310 shops and employ 89,700 people.
"The wave of layoffs and store shutdowns could be the worst in recorded history," said Annie Yau Tse, chair of HKRMA. Tse is also chairman and CEO of Hong Kong-listed jewelry retail chain Tse Sui Luen Jewelry International.
She said that the retail sector was unlikely to return to normal soon.
Protesters hit the streets in June to demand the withdrawal of a controversial extradition bill, which would have allowed Hong Kongers to be transferred to other places including mainland China to stand trial. Since then, the protests have evolved into a broader democracy movement. Activists have broadened their list of demands to include universal suffrage and an independent investigation into alleged police brutality, among other things.
As their clashes with the police turned increasingly violent in recent months, inbound tourist arrivals and property transactions have slumped, sending Hong Kong's economy into a technical recession.
The HKRMA in August urged landlords to cut rent by half for six months to counter slowing retail sales amid mass demonstrations.
-- By Benny Kung