Manpower issues harm Sasa Singapore

Sasa Singapore says government restrictions on staff hiring are adversely affecting its business in the city state.

As a result, the company plans to rationalise its store network and exit some leases early.

The Hong Kong-headquarter retailer says that during the year to March 31, turnover in Singapore decreased by 2.6 per cent in local currency to HK$243.7 million. Same store sales dropped by 5.9 per cent in local currency.

“The challenge of filling vacancies for frontline staff and Singapore’s acute manpower constraints adversely affected our store productivity,” the company said in its stock exchange filing in Hong Kong.

“Moreover, persistent high rental costs and dilution of sales due to the excessive increase in overall Singapore retail space contributed to the losses.”

In the year ahead, Sasa says it will close inefficient stores, and open stores in new malls with good potential.

“To cope with the persistent constraints in manpower, we will enhance staff product knowledge and monitor staff productivity. The group will also work on staff retention to minimise the loss of experienced sales staff and convert more job scopes into automation so that employees can concentrate on analytical and quality enhancement.”

Sasa says its Singapore sales decline was mainly due to slower domestic income growth, resulting in weaker retail sentiment.

“Tourism was also affected by the tragedy of the missing Malaysian Airlines passenger plane, with the top two tourist originating countries of Indonesia and China both seeing shrinkage in arrivals during the year.”

In Malaysia, turnover increased 6.1 per cent in local currency to HK$340.3 million. Same store sales decreased 0.2 per cent.

“Our retail sales and profit growth were impacted by changes in the management team, which adversely affected store productivity and our performance during the transitional period,” the company said.

Malaysia sales were also affected by the Malaysian Airlines tragedy, resulting in a drop in tourism numbers.

“We continued to expand our store network to provide enhanced service to our customers and to increase our competitiveness.”

In Taiwan, Sasa’s turnover grew 5.7 per cent in local currency to HK$289.2 million. Same store sales grew by 1.6 per cent.

“Sales were boosted by the enhanced house brand product mix and introduction of lower priced products and promotions, which drove traffic and sales through cross-selling. Our strategic store expansion plan began to bear fruit and we were able to capture the growth potential of increasing numbers of Mainland Chinese visitors,” the company reported.