I.T. Restricted beats the blues
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Hong Kong attire retailer I.T. Restricted has boosted turnover by 6.four per cent on an expanded retail footprint, regardless of the retail downturn that has been squeezing its rivals.
Complete gross sales reached HK$7.18 billion, with retail gross sales in Hong Kong, its largest market, up by zero.three per cent to HK$three.577 billion with similar retailer gross sales up zero.7 per cent.
It added almost one per cent of retail flooring area in Hong Kong to 631,292 sqft.
Mainland China offered probably the most progress, nevertheless, with gross sales up 18. 2 per cent to HK$2.56 billion and similar retailer gross sales up four.5 per cent.
It added 12.three per cent of flooring area in China, reaching 978,854 sqft.
And in Japan, the place the financial system had a sluggish yr, I.T.’s gross sales rose 5.four per cent in Hong Kong greenback phrases, or 14.5 per cent on Japanese foreign money, to HK$434 million.
In Macau, complete retail gross sales rose 1.6 per cent to HK$221.three million.
I.T. posted a gaggle revenue improve of 10.four per cent to HK$four.464 billion with a gross revenue margin of 62.2 per cent – up on the earlier yr’s 59.9 per cent. Internet revenue elevated 11.7 per cent to HK$312.9 million.
“posted a gaggle revenue improve of 10.four per cent to HK$four.464 billion with a gross revenue margin of 62.2 per cent – up on the earlier yr’s 59.9 per cent.”
In its earnings assertion, the corporate stated the enterprise setting throughout Hong Kong, mainland China and Japan had stabilised steadily.
“Nevertheless, the financial restoration on a worldwide scale remained subdued and unsure. A number of home and peripheral elements, alongside the intensified regional tensions, continued to have appreciable impacts on the retail enterprise. Particularly, the political demonstration which started in late September 2014 in Hong Kong triggered a degree of disruption to our operations.”
The corporate cited a “prudent but versatile strategy” to its enterprise in Hong Kong for weathering the storm out there which accounts for 50.6 per cent of its turnover.
“The political demonstration, which lasted for greater than two months, extremely affected our retail enterprise in the course of the interval. While the shift of the Chinese language New Yr interval from January final yr to February this yr prolonged the normal buying season, the tempo of restoration progressed very slowly. In consequence, spending momentum and retailer visitors amongst native shoppers and inbound guests confirmed no signal of noticeable enchancment.”
Shifting ahead, the corporate stated it might keep “a dominant and balanced retail presence” in Hong Kong, with extra greater measurement shops “to facilitate new concepts and new purchasing pleasure together with numerous in-store advertising campaigns which allow us to increase direct interplay with our clients”.
Because of much less proactive reductions provided in the course of the yr, gross margin elevated 1.four proportion factors to 60.7 per cent. “Nevertheless, such achievement in gross margin has but to completely offset the rise in working prices, resembling rental and employees prices which remained probably the most good portion of our working bills.”
In the meantime, Macau confirmed “modest progress” following the downturn in gaming spend.
Questions & Answers
Q.What contributed to the increase in I.T. Restricted's gross profit margin this year?
What contributed to the increase in I.T. Restricted's gross profit margin this year?
The company's gross profit margin rose to 62.2 per cent, up from 59.9 per cent previously. This improvement was partly due to offering fewer proactive discounts throughout the year.
Q.How did the political demonstrations in Hong Kong affect I.T. Restricted's performance?
How did the political demonstrations in Hong Kong affect I.T. Restricted's performance?
The political demonstrations in late September 2014 significantly disrupted operations and affected retail business. Spending momentum and store traffic among local consumers and inbound visitors showed no noticeable improvement during this period.
Q.Which market showed the strongest growth in sales for I.T. Restricted?
Which market showed the strongest growth in sales for I.T. Restricted?
Mainland China recorded the most significant growth, with sales increasing by 18.2 per cent to HK$2.56 billion. Similar store sales in this region also grew by 4.5 per cent.
Q.Despite increased gross margin, what challenges did I.T. Restricted face regarding operating costs?
Despite increased gross margin, what challenges did I.T. Restricted face regarding operating costs?
The improved gross margin did not fully offset the rise in operating costs. Rental and staff costs remained the most substantial portion of their operating expenses, posing a challenge for the company.
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