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Fortnum & Mason sees tough Hong Kong opening after record year

by ace
Fortnum & Mason

Fortnum & Mason (F&M), a luxury grocery store, has admitted a challenging opening to its first overseas store and unveiled another year of record sales.

The 312-year-old company, which has grown substantially from its main base in Piccadilly, London, since the last recession, said its first five days of sales in Hong Kong were down more than 50 percent from expectations.

But Chief Executive Ewan Venters said that on returning from personal supervision of the event in troubled Chinese territory, he was pleased with the opening.

The British luxury retailer is known for its luxury teas and preserves, as well as making food difficult

The difficult political landscape in Hong Kong reflects concerns among residents about their democratic rights under Chinese rule.

There have often been violent protests, including battles with street security services.

The problems resulted in business disruption and were largely blamed for driving the economy of Hong Kong into recession.

Luxury brands such as Burberry are among others allowing for setbacks in sales.

Venters noted that tensions in recent weeks eased considerably before F&M stores and restaurants opened, but he told Sky News that there was no launch party to mark the opening – publicly announced in April.

"A long period of peace will help," he said, suggesting that sales are over budget by the end of January.

Hong Kong Harbor View from F&M's New Restaurant

He cited 4,000 bookings for December – the crucial month of Christmas – but said store sales are being depressed by fewer visitors in Hong Kong as a result of political uncertainty.

The overall business scenario remained strong for the 12 months to July 14 – its last fiscal year.

Online ordering from Hong Kong and Japan was largely responsible for contributing to international growth as total revenue increased 12% to £ 138 million. Profits increased by 26% – over £ 12 million.

In the United Kingdom, where it also operates a number of restaurants and stores, sales increased by 10% on a comparable basis.

Tea cups in Fortnum and Mason
Loose-leaf tea remains among F&M's most popular products and growth is being explained by demand from younger customers

F&M pointed to continued strong growth in in-store and online loose-leaf tea and saw an increase in demand for vegetarian and vegan products as customers, especially younger buyers, were looking for greener products.

The non-alcoholic tea was also taking off, the company said.

Venters was optimistic ahead of the crucial Christmas trading period, despite the "most challenging consumer scenario for years," citing Brexit's continuing stalemate.

He said: "We are now looking forward to a busy and successful Christmas. We believe the particular mark of festive joy that Fortnum strives to offer will be a welcome relief in these uncertain times."


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