Pricerite braces for more pain in battle to beat downturn

Local home furnishings store chain Pricerite, which is under Celestial Asia Securities (1049), has laid off 10 percent of its workforce and closed four stores in the past nine months due to the social unrest and outbreak of the novel coronavirus, and may adopt more cost-control measures.

The company is asking back-office staff to take unpaid leave and middle- and high-level managers to take salary cuts by 20 percent from Feburary to May, while the pay for executive directors also will be cut by 40 percent from Feburary to June.

It also has slowed down the hiring process.

Pricerite operated 28 stores in Hong Kong and had 800 full- and part-time staff as of December last year. The company said it is carefully considering whether to extend the lease of eight branches that will expire this year.

Celestial Asia Securities chairman and chief executive Bankee Kwan Pak-hoo said customer flow at its branches had reduced by 30 percent in the past three quarters amid the protests and outbreak. The supply of furniture, meanwhile, is facing huge pressure, as the virus is disrupting supply chains and delaying factories reopening in the mainland.

Kwan added the company may adopt other measures such as further job cuts and store closures if the economy does not recover in the short term. He said the company is discussing with landlords to cut rents.

Pricerite also has been searching for surgical masks and cleaning products globally in the past few months and will offer them once the goods arrive in Hong Kong.

The virus has dealt another blow to Hong Kong's economy which has already entered into the recession with retail, aviation, catering, and other tourism-related sectors the hardest hit.

Fashion retailer chain H&M gave up renewing the lease of its store in Tmtplaza in Tuen Mun, ending a nine-year operation next month, local cosmetic giant Sa Sa International (0178) has closed 20 Hong Kong stores, Chow Tai Fook Jewellery (1929) has shut more than 40 stores in Hong Kong and Macau while its rival Tse Sui Luen Jewellery (International) (0417) has suspended operations of 18 branches in the two cities.