Le Saunda Hong Kong sales plunge
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Le Saunda Hong Kong and Macau sales plummeted 26.6 per cent in the first half of this year as tourist spending declined.
Le Saunda manufactures and sells shoes, handbags and fashion accessories and sells them in Hong Kong, Macau and Mainland China under the brands of Le Saunda, Le Saunda Men, Linea Rosa and CNE. The company in also involved in property, trade-mark and management services. It has 833 stores, 20 fewer than at the same time last year.
In its half year results, Le Saunda said sentiment in Hong Kong’s retail market is deteriorating, as the number of tourist arrivals in the city continued to fall and consumer confidence weakened.
“Meanwhile, unyielding rental for commercial premises further aggravated the burden of retailers.”
Le Saunda closed five stores in Hong Kong and Macau during the period, reducing the total store network in the two cities to 16.
It was a better picture in Mainland China, however, where the company achieved retail sales growth of 3.8 per cent.
Total group revenue for the six months increased by 0.4 per cent to RMB755.8 million and consolidated gross profit decreased by 0.4 per cent to RMB501.8 million. The overall gross profit margin decreased by 0.5 percentage point to 66.4 per cent.
Questions & Answers
Q.What specifically caused the significant drop in Le Saunda's sales in Hong Kong and Macau?
What specifically caused the significant drop in Le Saunda's sales in Hong Kong and Macau?
The company attributed the sales decline to a decrease in tourist spending, fewer tourist arrivals in the city, and weakening consumer confidence. Also, unyielding commercial rental costs worsened the situation for retailers.
Q.How did Le Saunda's performance in Mainland China compare to its Hong Kong and Macau operations during the same period?
How did Le Saunda's performance in Mainland China compare to its Hong Kong and Macau operations during the same period?
In contrast to the sales plunge in Hong Kong and Macau, Le Saunda experienced a positive retail sales growth of 3.8 per cent in Mainland China. This indicates a much better picture for the company there.
Q.What impact did the regional sales performance have on Le Saunda's overall financial results for the six-month period?
What impact did the regional sales performance have on Le Saunda's overall financial results for the six-month period?
Despite the decline in Hong Kong and Macau, total group revenue increased by 0.4 per cent to RMB755.8 million, while consolidated gross profit slightly decreased by 0.4 per cent to RMB501.8 million. The overall gross profit margin fell by 0.5 percentage points.
Q.What measures did Le Saunda take in response to the challenging market conditions in Hong Kong and Macau?
What measures did Le Saunda take in response to the challenging market conditions in Hong Kong and Macau?
Le Saunda closed five stores in Hong Kong and Macau during the period. This reduced their total store network in these two cities to 16, indicating a consolidation strategy in response to the downturn.