In recent months, a string of protests by common citizens of Hong Kong has not only created political tensions in the city, it has also hit business – especially those in the luxury segment.

The latest luxury brand in a string of such companies to report a hit to business because of the demonstrations and protests is the luxury brand Richemont. The Swiss brand that deals in offering luxury watches to customers, said that sale of its products has been hit hard because of the ongoing protests in Hong Kong – which is a crucial market for the brand.

The continued protests against a controversial law that China wants to impose there and one that has already been shelved by the Hong Kong authorities has forced retailers in the territory got to predict a very significant drop in their sales. Reports also suggested that the tourism sector was also being affected.

The protests have been ongoing since the last one month on the streets of Hong Kong and more demonstrations are predicted for the weekend. Protesters have demanded the permanent shelving of the law that would allow extradition of people from the territory to mainland China for trials and investigations.

While shelving the law was the starting point of the latest round of demonstrations, protesters now demand broader demands for democratic reform over rising concerns that the freedom and democratic rights of the people of the territory are being eroded.

The importance of the city for luxury brands is because it is a hub for wealthy Asia shoppers and the demonstrations, that sometimes turned violent, have disrupted business in the city. There has been widespread trading disruption and forced the closure of many stores.

In the three months to June, barring Hong Kong, there was a rise in sale for Richemont, the company said in a statement on Thursday. In Hong Kong, sale of the company during the quarter was down because of the ongoing protests as well as the strength of the local dollar.

During the past month, most of the members of the Hong Kong Retail Management Association (HKRMA) reported a drop in sale, the body said earlier this week, while also forecasting the businesses would suffer more in the near future.

“The unexpected store closures due to the protests not only led to sales loss, but also directly affected retail staff’s take-home income, especially part-time staff and those paid on a commission basis,” the HKRMA said in a statement.

For retailers, the peak business season is July and August, but because of the continued and spreading the protests, “our members forecast a drop by double digit in the next months”, the group said.

Concerns over the situation have also been voiced by tourism operators.

According to reports quoting the Hong Kong Federation of Unions, compared to an average of 7,800 every month in the number of tour groups from mainland China at the beginning of the year, the number had dwindled down to 5,641 in June.

(Adapted form BBC.com)

Categories: Economy & Finance, Geopolitics, Regulations & Legal, Strategy, Sustainability, Uncategorized