Hong Kong retailers under strain as changing trends drive store closures
A 36-year-old Chinese seafood restaurant chain and a popular high-end food court in the bustling Causeway Bay district closed this week.
Other recent closures in the financial hub include cinema chains, a major catering group, a 41-year-old bakery and a three-decade-old congee chain.
Weak domestic spending and cheaper prices in Shenzhen, bordering Hong Kong, have compounded retailers' woes, according to industry figures and analysts.
Furthermore, China's economic slowdown, US-China geopolitical tensions and a national security clampdown have also weighed on business sentiment and hurt Hong Kong's small and open economy. The city's GDP is forecast to grow between 2 to 3 per cent this year, compared with 2.5 per cent last year and 3.2 per cent in 2023.
'The change in consumption patterns is irreversible,' said Annie Yau Tse, chairwoman of Hong Kong's Retail Management Association.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Sign Up
Sign Up
Hong Kong was once a prime destination for high-spending mainland visitors but mass anti-government protests in 2019 and Covid restrictions led to a decline in its appeal.
The authorities have launched initiatives to revive tourism, including hosting large-scale events such as Coldplay concerts and a Manchester United exhibition match at a new harbourside stadium.
While visitors are returning to near 2018 levels with May arrivals up 20 per cent to 4.1 million visitors versus five million in 2018, spending remains soft.
Retail sales by value rose 2.4 per cent in May from a year earlier to HK$31.3 billion (S$5.1 billion), the first rise in 14 months, government data showed on Wednesday. However, it remains only around 77 per cent of the HK$40.5 billion in May 2018.
'We are trying hard to think of ways to turn the traffic into business,' Yau Tse said.
Jack Tong, director of Savills Research & Consultancy, said the recent string of closures was due to a 'structural shift in the local retail market' starting from 2023.
It is 'no longer strong enough to support such retail trades and would be beyond repair even by further reducing rents'.
Overall prime street rents in the first quarter have fallen back to 2003 levels, he said.
'The rise in local outbound travel in Hong Kong and changes in mainland tourists' spending patterns and preferences in Hong Kong and Macau continued to weigh on the overall retail sector during the financial year,' jeweller Chow Tai Fook said.
Last month, Cafe de Coral reported a 29.6 per cent drop in net profit for the 2024/25 year ended in March, citing a weak economy and consumer sentiment.
Despite the tough conditions, some signs of recovery are emerging.
Vipul Sutariya, who attended the jewellery fair in June, said Chinese dealers were back at the fair 'not to buy immediately but to ask, which is the biggest change in the past 1.5 years', he said. 'In my view, that's a good sign.' REUTERS
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Straits Times
10 minutes ago
- Straits Times
Russian fuel prices surge after Ukraine hits refineries
Sign up now: Get ST's newsletters delivered to your inbox A screengrab from a video circulating on social media shows what is said to be an oil refinery fire in Russia after the plant was hit by Ukrainian drones. MOSCOW - Russian fuel prices are at near-record highs, stock exchange data showed on Aug 21, after a slew of Ukrainian attacks on refineries caused breakdowns during the travel season. Ukraine routinely targets Russian refineries and oil depots to hamper Moscow's ability to fund its invasion. Recent hits have coincided with the summer holiday season and have contributed to higher rates of driving over train and air travel. In a bid to tame prices, Russia, one of the world's biggest oil producers, introduced a total ban on fuel exports in July, but it appeared to have little effect. AI-92 and AI-95, the two most popular fuel blends in Russia, were trading at around 72,663 and 81,342 thousand roubles per tonne (US$900 and US$1,000), close to their all-time highs, according to trading data from the Saint Petersburg commodities exchange. Russian broker BKS cited 'the high season, repairs and new accidents at the refineries' as reasons for the price surge, noting higher demand for fuel because people tend to drive more during the summer months. Additionally, Ukrainian attacks have also disrupted air and railway travel, further contributing to the surge, the brokerage said. Top stories Swipe. Select. Stay informed. Singapore Courier tip-off leads to HSA seizure of Kpods, drugs in Tampines and Grange Road raids Singapore Large flocks of parakeets a spectacle in Choa Chu Kang, but they may affect native species Singapore Singapore students shine in Paris with record medal haul at history Olympiad Singapore Teacher charged over allegedly making student undress in video call, sending her his nude photo Singapore Painting by police NSF presented to Shanmugam to commemorate 50 years of Police National Service Business 8 more active ETFs by JPMorgan Asset Management available to Singapore investors Business Changi Travel Services cuts 30 staff amid market shifts Asia HK water scandal: How distrust over China bottled water sparked a probe into govt contract 'Recent disruptions at the Afipsky, Ryazan and Saratov oil refineries could have reduced the petrol supply on the market,' it added, saying this could have probably exacerbated the situation. Ukraine claimed to have hit the three refineries this month, but there was no official comment from Russia on any stoppages there. The Russian energy ministry said the price rise was due to 'high seasonal demand and agricultural works', and supported extending the ban to September as well, without mentioning Ukrainian strikes or any repair work on refineries. The fuel shortage is the most acute in Russia's south and far east, as well as in the part s of Ukraine held by Russian troops, local authorities said. AFP
CNA
29 minutes ago
- CNA
Asia First - Thu 21 Aug 2025
02:20:53 Min From the opening bell across markets in Southeast Asia and China, to the biggest business interviews and top financial stories, tune in to Asia First to kick-start your business day.
CNA
29 minutes ago
- CNA
Li Ning Company Limited Announces 2025 Interim Results
Implementing the Core Strategy of 'Single Brand, Multi-Categories, Diversified Channels' | Excelling Through Professionalism, Strengthening Strategic Foundations FINANCIAL HIGHLIGHTS In the first half of the year, the Group recorded the following operating results: - Revenue rose by 3.3% to RMB14,817 million; gross profit margin declined by 0.4 percentage points to 50% - Net operating cash inflow was RMB2,411 million - Net profit attributable to equity holders was RMB1,737 million with net profit margin of 11.7%, and EBITDA margin was 23.7% Working capital remained at a healthy level: - The percentage of gross average working capital to revenue was 7.3% - The cash conversion cycle was flat at 31 days compared to the same period last year The Board resolved to declare an interim dividend of RMB33.59 cents per ordinary share of the Company issued or to be issued upon conversion of convertible securities for the six months ended 30 June 2025. OPERATIONAL HIGHLIGHTS The retail sell-through for the overall platform increased by low-single-digit from last year, including online and offline channels. Channel inventory increased by low-single-digit comparing to the same period last year. The inventory turnover and ageing structure remained at a healthy level. Offline channel new products sell-through accounted for 84% of overall offline channel sell-through, maintaining a healthy and reasonable level. HONG KONG SAR - Media OutReach Newswire - 21 August 2025 - Li Ning Company Limited (the "Company" or "Li Ning Company"; together with the subsidiaries, collectively, the "Group"; stock codes: 2331 (HKD counter) and 82331 (RMB counter)) announces today its 2025 interim results for the six months ended 30 June 2025 (the "Reporting Period"). Financial Results In the first half of 2025, the Group steadily consolidated its operational foundation and actively accumulated momentum for business development, achieving steady revenue growth. During the Reporting Period, the Group's revenue amounted to RMB14,817million, representing an increase of 3.3% as compared to the corresponding period of 2024 (2024H1: RMB14,345 million). Gross profit amounted to RMB7,415 million, representing an increase of 2.5% as compared to the corresponding period of 2024 (2024H1: RMB7,236 million). The overall gross profit margin declined by 0.4 percentage points to 50.0%(2024H1: 50.4%). During the Reporting Period, the net profit attributable to equity holders was RMB1,737 million (2024H1: RMB1,952 million). The margin of net profit attributable to equity holders was 11.7% (2024H1: 13.6%). Return on equity attributable to equity holders was 6.5% (2024H1: 7.8%). Basic earnings per share was RMB67.43 cents (2024H1: RMB75.80 cents). The Board resolved to declare an interim dividend of RMB33.59 cents (2024H1: RMB37.75 cents) per ordinary share of the Company issued or to be issued upon conversion of convertible securities for the six months ended 30 June 2025. The interim dividend payout ratio is 50%. In terms of cash flow management, the Group's net cash generated from operating activities for the Reporting Period amounted to RMB2,411 million (2024 H1: RMB2,730 million). As at 30 June 2025, cash and cash equivalents (including cash at banks and in hand, and time deposits with original maturity of no more than three months) amounted to RMB11,798 million, representing an increase of RMB4,299 million, as compared with the position as at 31 December 2024. Adding back the amount recorded as time deposits, cash balance amounted to RMB19,190 million, which represented a net increase of RMB1,050 million as compared to 31 December 2024. During the Reporting Period, the decrease in retail revenue led to a reduction in retail collections. In addition, tax payments increased, resulting in a year-on-year decrease in net cash generated from operating activities. Meanwhile, the maturity and redemption of time deposits led to a significant increase in net cash generated from investing activities. The Group will continue to place extra emphasis on cash flow management to ensure the stable development of the Company in the long term. Operational Summary In the first half of the year, the Group continued to strengthen its core strategy of "Single Brand, Multi-categories, Diversified Channels" steadily advancing planned initiatives across key areas including product upgrade, brand marketing, and channel optimization. Leveraging years of efforts and accumulated experience in professional sports, and relying on superior product excellence and brand strength, the Group successfully signed an agreement in 2025 to become the official sportswear partner for the Chinese Olympic Committee and the Chinese Sports Delegation from 2025 to 2028. During the Reporting Period, anchored by its core strategy of the marketing theme of "China's Glory, LI-NING Support"（中國榮耀，李寧同行）under its new Olympic identity, the Group reinforced its professional image as an unwavering supporter of Chinese sports, and further cemented its core positioning as a professional sports brand. In respect of professional product and marketing, the Group focused on the six core categories of running, basketball, training, badminton, table tennis and sports casual, while actively grasping market trends and exploring new sports subcategories, such as outdoor sports, tennis and pickleball. The Group continued to strengthen its product capabilities through technological innovation and enhance the deployment of professional sports resources, based on three key pillars: solidifying a professional sports mindset, showcasing sports fashion aesthetics, and inheriting Chinese cultural values. Moreover, it proactively sought to strengthen its differentiated brand advantages, promote brand recognition and popularity and enhance brand influence through diversified and comprehensive marketing campaigns. In respect of channel, the Group has actively built a multi-dimensional channel network, and systematically promoted deepening of market coverage and upgraded of operational efficiency. In high-tier markets, through deepening strategic coordination with top-tier commercial entities and leading outlet projects, the Group promoted innovative store format planning and deployment. In emerging markets, the Group implemented deep expansion and optimised channel hierarchy layout to expand market share. As of 30 June 2025, the number of conventional stores, flagship stores, China LI-NING stores and factory outlets under the LI-NING brand (including LI-NING Core Brand and LI-NING YOUNG) amounted to 7,534, representing a net decrease of 51 as compared to 31 December 2024. In terms of retail operations, the Group focused on the systematic construction of operating models in high-tier markets and distribution business models. Through channel structure optimisation, adjustment of store product mix, and planning of consumer interaction activities, the Group has strengthened brand mindshare penetration and improving product operation efficiency. In addition, the Group concentrated on optimising store visual presentation and marketing promotion quality, upgrading property cooperation effectiveness, and enhancing the professional service capabilities of sports consultants. The Group has also strengthened efficient collaboration between headquarters and terminals, continuously improved retail process standards, and made full preparations for new store expansion and retail capability enhancement during the Olympic cycle. In terms of new retail business, the Group has comprehensively deepened the construction of its new retail business system. With digital upgrade as the core, the Group has been committed to driving all-round enhancement of business efficiency. For the e-commerce business, in the face of a challenging market environment across the industry, the Group adhered to a prudent and steady operational strategy. By fostering strong cooperation between online and offline channels, developing exclusive marketing IPs, and strategically deploying key promotional campaigns, the Group continued to drive comprehensive improvements in operational efficiency, making e-commerce a key motivation for the growth. In terms of supply chain, the Group continued to advance deep optimisation and strategic upgrading of its supply chain, focusing on four core objectives: quality control, delivery assurance, cost optimisation, and sustainable development, and has achieved notable results. Breakthrough progress was made in flexible supply capabilities, successfully expanding into e-commerce exclusive product lines, and establishing a rolling replenishment system and cross-channel coordination mechanism to maximise market demand fulfilment. In addition, the Group deeply integrated the sustainability concept into supply chain practices, effectively advancing the implementation of green products, with order volume of eco-friendly products exceeding target levels. In the first half of the year, the Group vigorously promoted the strategic construction of the logistics system, focusing on three core directions: omnichannel logistics integration, digital upgrade, and automation optimisation, to achieve comprehensive enhancement of logistics efficiency and precise optimisation of cost control. During the Reporting Period, the launch of the Nanning central warehouse marked the Group's completion of nationwide logistics and warehousing network deployment, further enhancing market responsiveness and core competitiveness. In terms of kidswear business, LI-NING YOUNG has achieved steady progress in product optimisation, channel expansion, retail efficiency enhancement and brand marketing, with an emphasis on improving its professional brand image and market share. In terms of product optimisation, LI-NING YOUNG continued to drive progress through product research and development, and IP establishment, fostering breakthrough growth in its core categories. In terms of channel development, LI-NING YOUNG focused on expanding market coverage and enhancing channel quality, with a strong commitment to implementing a multi-channel growth strategy. In addition to deepening its presence in core markets, it strategically expanded emerging markets and strengthened its outlet channel layout. In terms of marketing and promotion, LI-NING YOUNG has fully leveraged the Group's resources, working in close collaboration with categories such as basketball and running to provide a wide range of brand experiences to consumers through diversified marketing campaigns. As at 30 June 2025, the total number of LI-NING YOUNG POS amounted to 1,435, representing a net decrease of 33 POS since 31 December 2024. Outlook Looking ahead, the Group will firmly implement the core strategy of "Single Brand, Multi-categories, Diversified Channels", uphold the core value of "Serve with Sportsmanship", and continuously refine "LI-NING's Experience Value". 1. Building Product Competitive Advantage: The Group will continue to rely on the LI-NING Technology Innovation Platform（李寧科技創新平台）to optimise product structure, strengthen diversified deployment under the single-brand strategy, and build differentiated competitive advantages. We will focus on the deep integration of technology and fashion, creating a sports product matrix that combines functionality and trend aesthetics, meeting consumers' full-scenario needs, and actively driving market share acquisition across various sub-segment markets. At the same time, the Group will accelerate the deployment in high-growth potential markets, focusing on breakthroughs in three emerging tracks: women's sports, outdoor gear, and youth sports products, to seize market opportunities and cultivate new business growth drivers. In addition, the Group will increase R&D investment, leveraging core technologies to enhance product strength, and reinforce long-term competitive advantage through technological barriers. 2. Deepening the Cooperation Effectiveness with COC: LI-NING will fully support the Chinese Sports Delegation in competing on the international stage through high-quality products and highly efficient services. At the same time, the Group will further orderly launch online and offline marketing activities around this top-tier cooperation. It plans to release the 2026 Milan Winter Olympics apparel in the second half of the year, and initiate themed marketing campaigns for the Winter Olympics, continuously deepening LI-NING's professional sports image. 3. Focusing on Business Quality and Efficiency Enhancement: The Group will coordinate efforts across three key areas, channels, products, and supply chain, to achieve dual improvement in business quality and efficiency. Channel efficiency upgrades will be pursued through dual breakthroughs in offline and online operations. Offline, the Group will enhance terminal competitiveness through initiatives such as efficiency improvement in high-tier markets, strengthening distribution capabilities, and deep cultivation of emerging markets. Online, the Group will unleash sales potential through overall ecosystem governance and brand marketing integration, aiming to achieve maximised online and offline sales. On the product side, by enhancing the full-chain system and improving the accuracy of omnichannel product planning, the Group will achieve significant optimisation of supply-demand matching, flexible production, and inventory turnover. In terms of supply chain, the Group will focus on three core indicators: cost control, quality improvement, and delivery timeliness, and deepen strategic integration with product and merchandise operations to enhance overall efficiency. 4. Consolidating Foundations to Drive Growth: To consolidate the foundation for corporate development, the Group will focus on enhancing talent-driven development, financial governance and digital-intelligence empowerment as three core pillars. In terms of talent-driven development, the Group will build talent teams based on strategic business needs, continuously optimize organisational effectiveness, and establish a flexible and efficient operational structure. In terms of financial governance, the Group will strengthen target management, establish more rigorous budget management and risk control mechanisms, enhance financial transparency and capital utilisation efficiency, and provide robust financial assurance for strategic implementation. In terms of digital-intelligence empowerment, the Group will deeply apply cutting-edge AI technologies, build a digitalised operational support system, and enhance market insight and consumer analysis capabilities, laying a solid foundation for high-quality development. Mr. Li Ning, Executive Chairman and Joint CEO of the Group, concluded, "Driven by policy promotion, technological iteration, and changes in consumer demand, the industry overall possesses potential for high-quality growth, with opportunities and challenges intertwined. Looking ahead to the second half of the year, the Group will maintain a prudent attitude, continue to consolidate its business foundation. At the same time, the Group will closely monitor market dynamics, actively capture and seize potential structural opportunities, and promote long-term sustainable growth through a series of strategic initiatives, striving to become consumers' preferred professional sports brand." Hashtag: #LiNing #Sportswear # The issuer is solely responsible for the content of this announcement. About Li Ning Company Limited Li Ning Company Limited is one of the leading sports brand companies in China, mainly operating professional and leisure footwear, apparel, equipment and accessories under the LI-NING brand. The Group has comprehensive research and development, design, manufacturing, marketing, distribution and retail management capabilities. It has established an extensive retail distribution network and supply chain management system in China. We are committed to be the most prominent, stylish, world-leading sports brand from China. In addition to its core LI-NING brand, the Group also manufactures, develops, markets, distributes, sells various sports products which are self-owned by or licensed to the Group, including Double Happiness (table tennis), AIGLE (outdoor sports) and Kason (badminton), which are operated through joint venture/associate with third parties of the Group.
