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Fortnum Mason sees tough Hong Kong opening after record year

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Fortnum - Mason (F-M), the luxury grocer, has admitted a challenging opening for its first overseas store while revealing another year of record sales.The 312-year old firm, which has grown substantially from its flagship base in London's Piccadilly since the last recession, said the first five days of sales in Hong Kong came in more than 50% down on expectations.But chief executive Ewan Venters said, on his return from personally overseeing the event in the troubled Chinese territory, that he was pleased with the opening nonetheless.Image:The upmarket British retailer is known for its luxury teas and preserves, as well as its food hampersThe tough political backdrop in Hong Kong reflects concerns among residents about their democratic rights under Chinese rule.There have often been violent protests, including running battles with the security services on the streets.The troubles have resulted in disruption to businesses and been widely blamed for driving Hong Kong's economy into recession.Luxury brands, such as Burberry, have been among others to admit sales setbacks.Mr Venters noted the tension of recent weeks had calmed considerably in advance of F-M's store and restaurant debut but he told Sky News there was no launch party to mark the opening - announced publicly in April."An extended period of peace will help," he said, tipping sales to be ahead of budget by the end of January.Image:The view of Hong Kong harbour from F-M's new restaurantHe cited 4,000 bookings for December - the crucial Christmas month - but said it was clear store sales were currently being depressed by fewer visitor numbers to Hong Kong as a result of the political uncertainty.The picture for the broader business remained strong in the 12 months to 14 July - its last financial yearOnline orders from Hong Kong and Japan were largely responsible for contributing to international growth as total revenues rose 12% to £138m.

Profits were 26% up - above £12m.In the UK, where it also operates a number of restaurant and store outlets, sales were up 10% on a like-for-like basis.Image:Loose leaf tea remains among the most popular products at F-M and growth is being explained by demand from younger customersF-M pointed to continuing strong growth for loose leaf tea in-store and online and noted a surge in demand for vegetarian and vegan products as customers, particularly younger shoppers, sought out environmentally-friendly produce.Non-alcoholic sparkling tea was also taking off, the company said.Mr Venters was upbeat ahead of the crucial Christmas trading period despite "the most challenging consumer backdrop for years", citing the continuing Brexit impasse.He said: "We are now looking forward to a busy and successful Christmas.

We believe the particular brand of festive cheer that Fortnum's strives to deliver will be a welcome relief in these uncertain times."




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Category: A World


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