Retail, Luxe Sectors Battle Shock Waves From War and Sars

Goldman Sachs in London downgraded its stance on the European luxury sector due to concerns over an extended war in Iraq and the deadly SARS virus.

According to Maceira de Rosen, other key shopping destinations for Golden Week are Hawaii and Korea. Hawaii, she noted, is also being impacted by the ongoing war in Iraq. Korea so far has not reported any cases of SARS.

As for Chinese mainland travelers, they account for about 20 percent of sales in Hong Kong. So far, sales in Hong Kong that are attributable to visitors from the mainland are down 10 percent. Maceira de Rosen concluded in her report that visitors from the mainland, where the epidemic originated, don’t appear to perceive any additional risk in visiting Hong Kong.

As for overall sales trends, she wrote, March was a difficult month for the luxury sector because of the Easter holiday shift to April 2003 from March 2002 and dampening sales in the U.S. market and in European capitals as a result of the start of and ongoing Iraqi war.
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