"The luxury sector's decline is largely due to last year's gold rush led by Chinese shoppers," said Caroline Mak, chairman of the Hong Kong Retail Management Association.

"The fever created a high base of comparison for this year's figure. Without the rush, there was hardly any boom in 2013..

According to Mak, the decline in luxury sales was looming as early as 2012.

"The average value per transaction was declining at that time. But as volume kept growing, total sales didn't slump. However, by the end of last year, the slide began.

"We expect a sharper decrease in the sector this year," she said.

Though the number of mainland visitors continues to rise in Hong Kong, their spending has been shrinking, Mak said.

"The average budget of tourists from the mainland is declining. Now, we seldom see big-ticket consumption. The impact on the retail sector is huge. Even though the number of visitors is still rising, it's on a slower pace.

"The golden age of the retail industry is behind us," Mak said.

"In the past three years, Hong Kong's retail business mushroomed aggressively. Continuous expansion with rocketing shop rents created a bubble. Now, with sales down, a tough time is on the way."

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