Pricerite faces ‘uphill battle’ as job cuts, store closures not enough to overcome slump amid coronavirus fears
- Leading furniture retailer says it is trying to negotiate rent reduction with landlords
- If retail woes continue, more staff cuts and leases on another eight stores may not be renewed, chairman says
Hong Kong furniture retailer Pricerite Group said it is taking more drastic cost-cutting measures than when it dealt with the Sars outbreak in 2003. It faces an “uphill battle” if landlords do not cut rents quickly enough to help the industry overcome the impact of the coronavirus epidemic.
The company, which sells home furnishing and household goods, has closed four branches over the past nine months when anti-government protests hit foot traffic and pummeled sales. It may surrender leases on eight more stores as the latest health scare delivers another blow to its bottom line.
Sales have come under tremendous pressure and customer flow has been reduced by 30 per cent in the past nine months, it said in a statement on Sunday. If the situation does not improve in the short term, it will be forced to further trim jobs and shut stores, it added.
“The landlords have been telling us that they are facing difficulties in offering rent reduction, but I hope that we could face this challenging time in partnership,” said Bankee Kwan Pak-hoo, chairman and CEO of Hong Kong-listed Celestial Asia Securities Holdings, which owns Pricerite. “It is an uphill battle. Do we really want to see Hong Kong’s unemployment rate continue worsening?”
Pricerite currently operates 27 stores and employs 800 full-time and part-time staff, Kwan said.