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Tuesday, March 10, 2020, 23:18
Executives of HK retailers reduce salaries to cut costs
By Pamela Lin
Tuesday, March 10, 2020, 23:18 By Pamela Lin

HONG KONG-Executives of two Hong Kong retail companies have offered to cut their salaries to reduce costs as the retail industry struggles to cope with lost business due to the spread of the novel coronavirus.

Jewelry giant Chow Tai Fook said on Tuesday its executive directors will reduce their salaries by 30 percent from February to April. The company stressed that it has no plans to lay off staff.  

Twenty of its stores have reopened, Chow Tai Fook said, after closing about 40 branches in Hong Kong and Macao since January due to concerns about staff safety and public health amid the epidemic.    

The jewelry retailer reported a 60 percent decline of retail sales value in Hong Kong and Macao in the first two months this year compared with the same period last year. Same-store sales dropped 49 percent on the Chinese mainland year-on-year.  

As the coronavirus continues to spread, the retail sector has taken a hit from the challenging global economy. Chow Tai Fook said the group is expanding online sales channels and encouraging staff to take online training courses on topics such as brand management, e-commerce and new retail experiences.  

Hong Kong apparel and accessories retailer Giordano has made an announcement earlier on Monday that its Chairman and Chief Executive Peter Lau Kwok-kuen would take a 50 percent salary cut. Other executive directors and senior management members in Hong Kong have implemented 30 percent pay cuts from March to May.  

Approximately 15 other managers in Hong Kong, Macao, the mainland, and less affected areas have implemented 10 percent to 20 percent voluntary pay cuts, according to Giordano. 

To control costs, Giordano said it has been negotiating with landlords for rent cuts and seeking more favorable terms from its suppliers.  

Hong Kong’s retail industry has been depressed since last year due to the often-violent anti-government protests. 

Latest data show that the city’s retail sales plunged by 21.4 percent in January from a year earlier, recording its 12-consecutive-month decline as the novel coronavirus further devastated the city’s tourism and retail sectors. 

The Hong Kong Retail Management Association predicted that the city’s retail sales would plunge 30 to 50 percent in the first half of this year. The association appealed to landlords to cut rents for more retail shops, and predicts that rent cuts for four to six months can help retailers.  

pamelalin@chinadailyhk.com


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