Hong Kong restaurant chain operator Tsui Wah Holding said its board members and senior management would take a 30 percent pay cut for three months to help reduce costs amid the novel coronavirus outbreak, according to a statement posted on the stock exchange on Friday.
The salary cut has taken effect from the beginning of February. The company has also formed a crisis management committee to assess the epidemic’s impact on its operations and financial performance. If the situation deteriorates further, it said, there could be some further adjustments.
The association (Hong Kong’s Retail Management Association) said the whole industry has entered an extremely chilly winter. Members of the association predict sales revenue to continue to drop 40 to 60 percent in February and March
Cosmetics retailer Sa Sa International announced on Thursday that all of its executive directors' salaries would be reduced by 75 percent for three months as retail sales plummeted during the Lunar New Year holiday.
The viral outbreak could further take a toll on Hong Kong’s retail industry which has been weakened by the economic recession and social unrest. Official data reveals retail sales plunged 11.1 percent last year year-on-year to HK$431.2 billion — the sharpest decline since 1998.
During the 10-day Lunar New Year holiday since Jan 24, sales revenue of most retailers in the city fell up to 50 percent, compared with the same period one year before, Hong Kong’s Retail Management Association said on Thursday.
Retailers of jewelry, watches, cosmetics and apparel, which are usually popular among mainland tourists, plunged as much as 80 percent.
The association said the whole industry has entered an “extremely chilly winter”. Members of the association predict sales revenue to continue to drop 40 to 60 percent in February and March.
If the retail industry fails to receive timely and appropriate support, there will be a spate of closures. Thus, the association urges landlords to halve rents for six months in order to help tenants overcome tough times.
The association suggests canceling the fixed rents and taking a certain percentage of tenant’s sales revenue as rent. It believes this is relatively fair and reasonable as fixed rents in Hong Kong have always been high, reflecting the strong industry environment in the past.
Some banks in Hong Kong are introducing measures to help businesses in the city overcome the impact the coronavirus outbreak has had on their finances. Bank of China said it would allow individuals and corporate clients to only make interest payments on their mortgage loans for up to six months including those in retail, catering, tourism and the hotel industry.
