No roar from Asian retailers as year of Tiger nears

No roar from Asian retailers as year of Tiger nears

By Angela Tan

SINGAPORE (Reuters): The Year of the Tiger will prove vicious
for Asia's retailers, with potential to leave a bloodbath among
the less savvy, analysts and shopowners say.

In Singapore, retailers lament that even sales of small items
like pineapple tarts and other lunar new year goodies have been
hit by Asia's financial malady.

The regional crisis has seen stock markets plunge and many
regional currencies lose 20 to 80 percent of their value against
the U.S. dollar since mid-1997. As a result, many of the area's
economies are a strict, if not starvation, fiscal diet.

Along Singapore's famed Orchard Road shopping belt, there has
been a relative dearth of the decorations that typically adorn
facades of major malls just ahead of the lunar new year,
celebrated by ethnic Chinese throughout Asia.

Together with Christmas, the Lunar New Year and the Islamic
Eid al-Fitr celebrations account for almost 60 percent of
retailers' annual turnover.

This year the latter holidays fall together at the end of
January. January 28 is the first day of the Year of the Tiger in
the 12-year Chinese zodiac cycle.

"We expect 1998 to be more difficult for the retail trade as
the full impact of the recent currency turmoil works its way into
the economies of the countries in the region," Jannie Tay,
managing director of Singapore's luxury watch retailer Hour
Glass, told Reuters.

Other Asian countries are unlikely to be spared the tiger's
wrath.

In Malaysia, retailers are reeling from sluggish sales.

"Our members have reported an average drop of 20 to 40 percent
in business," said Susan Chong, general manager of the Malaysian
Retailers Association.

The association's 110 members, who run 2,500 outlets in
Malaysia retailing goods from groceries to clothing, are prepared
for a 50 percent sales drop after the festivities.

"Some are already preparing for very stringent measures,
including laying off non-productive staff," she said.

Malaysia has launched an austerity campaign to weather its
economic crisis. Among measures recommended by the government is
a cutback on wasteful and luxury consumer goods.

In Hong Kong, some retailers are demanding landlords slash
rents by 40 percent, saying otherwise they would have to shut
their shops because business had been halved in recent weeks.

"People just do not come to buy things," said Philip Ma,
chairman of Hong Kong's Retail Management Association and group
managing director of The Sincere Company Ltd.

"People may see a 30-50 percent drop in business... The Asian
financial crisis is a factor, tourists are almost non-existent.
Locals are not in a spending mood when the stock market is so
low," Ma said.

"For 1998 we have a very pessimistic forecast. The retail
trade will be lucky to achieve the levels of 1997," Ma said.

"After Chinese New Year, we will see more shutdowns. It's
still the peak season, and people are making a last ditch effort
to convert stock to cash," he said.

Chinese New Year in Thailand will likely be more blue than
red, the traditional celebratory colour for the season, as the
country's wealthy Chinese suffer from the worst economic slump in
decades.

Sales of gold, once the most popular shopping items during
this time, have dropped substantially.

"When people walk into my shop these days, I would assume that
they are in to sell back the gold rather than buying," said
Samsak Cheung, owner of a retail gold shop in Bangrak, one of
Bangkok's major Chinese communities.

Fruit importers said they expected a big drop in sales this
holiday and would import fewer big apples, pears and Chinese
mandarin oranges, popular for the festivals.

In Indonesia, where the rupiah has lost over 80 percent of its
value to the U.S. dollar, retailers note a shift in demand away
from luxury goods to non-branded items.

The U.S.-based JC Penney's chain in Indonesia, considered a
luxury goods retailer, decided to close its last Indonesian
operation by end of 1997 due to the economic crisis.

Analysts said the closing down of the Penney stores signaled
more luxury goods stores would find it hard to survive in 1998
due to the ongoing crisis.

"Every Asian country has a soft market. Some worse than
others. All the markets have to rationalize," said Frank
Benjamin, president and chief executive officer of Singapore's
upmarket fashion retailer, FJ Benjamin.