Tuesday 17 September 2019

“Several dozen Hong Kong retailers likely to fold as protests hit sales, leaving thousands unemployed” | SCMP

“Freedom stickers” on shuttered shops
I said before that there would be an avalanche of bankruptcies because of the demos. Now it's starting: 30% of shops are asking staff to take unpaid leave.  That's the last desperate step before bankruptcy to try to staunch cash outflows. They can weather some time, maybe a few months, but not much more.  Retail works on fine margins, often just 5%. That means a drop of 5% in revenue and you're bleeding cash. The revenue drops recently are around 40%.
This is dramatically bad, worse than the 1997 Asian financial crisis, when I walked past boarded up shops in Tsimshatsui, and worse than the SARS crisis, when we all pulled together to quell the virus.
We lived through those challenges. This is way worse.
People, colleagues, friends, families, are divided. And the protesters appear
unmoved by the damage they're causing to their fellow residents. 
I just watched Carrie Lam giving her weekly presser. She keeps banging on about the damage to MTR stations like she's more worried about turnstyles than people. She needs to do something far more concrete and practical than her promise of "dialogue" next week. Land and housing for example. Listen to Beijing, Carrie! (Beijing has suggested taking land back from developers who are not using it — "use it or lose it" — and using it for public housing. That's a widely popular idea. Ok, there's expropriation concerns and "populist" concerns and proper compensation must be made. In future, it must be a condition of purchase, if it isn't already.  Singapore has worked it out. Why not Hong Kong). 
And just to cap off a crummy week Moodys has downgraded HK to "negative". 

Am I getting too morose? What's the bright side? Maybe that some serious concerns have been forcefully out to government and they know they must do something other than platitudes. There, that's it …

"It is just too hard to survive," said Alexa Chow Yee-ping, managing director of AMAC Human Resources Consultants, adding that retail chains were trying their best to keep permanent staff despite the gloomy scene.
About 20 per cent to 30 per cent of retailers were now starting to send full-time employees on unpaid leave to cut costs after having let go of part-time workers.