Moiselle International losses mount
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Fashion group Moiselle International has strengthened its margins but still posted a loss in the last half year.
While its loss of about HK$35 million (US$4.5 million) was about 10 per cent more than its loss of about HK$32 million for the same period last year, Moiselle International had a healthier gross profit margin of 79 per cent, up from 76 per cent.
Revenue declined 18 per cent to $132 million, its unaudited interim results to the end of September show.
Moiselle says it was hit hard by the harsh operating environment as it derived about 55 per cent of its revenue from Hong Kong and 18 per cent from China. Its retail sales in Hong Kong were affected by the fall in the number of mainland tourists as well as exorbitant rents. In China, the economic slowdown dampened the consumer sentiment.
The remaining 27 per cent of the revenue was made up by sales in Macau, Singapore and Taiwan.
To cope with the difficult market, the group rationalised its retail network, introduced stringent cost-control measures, continued cost-effective sales and marketing initiatives such as adopting an online-to-offline business model, introduced exclusive services for high-end customers with a VIP club, and introduced products of a wider price range to broaden its customer base and cater for young Hong Kong customers.
Meanwhile, the group stepped up its multi-brand strategy by launching fashionable loungewear under a new brand, promoted in the group’s two fashion shows in Hong Kong and Beijing.
Hong Kong sales fell 18 per cent year-on-year to about $72.3 million. The group continued to negotiate for lower rents for shop spaces, opened shops at prime locations with reasonable rents and closed down underperforming outlets.
Online initiatives
“Moiselle says it was hit hard by the harsh operating environment as it derived about 55 per cent of its revenue from Hong Kong and 18 per cent from China.”
Sales in China fell by 31 per cent to about $23.4 million. The group closed some shops and relocated others. It also stepped up its initiatives in eCommerce, such as opening an online store under the Moiselle brand at Tmall this month.
To reinforce its online marketing efforts, the group worked with key opinion leaders on social media such as WeChat and Weibo.
China’s measures to advocate frugality spilled over into Macau’s retail market. The group continued to run five shops at the Venetian Macao Resort Hotel and opened a store at the Parisian Macao Hotel. It had two concept stores and four other outlets in the city which generated a combined revenue of about $17.97 million, or about 14 per cent of the group’s revenue.
Taiwan’s 20 retail stores generated about $13.7 million, about 10 per cent of the group’s total revenue. It opened three more outlets and counters during the half-year.
Operations in Singapore
In Singapore, sales fell 22 per cent to about $4.14 million. The group has retained seven stores there.
At the end of September, the group had 84 stores and counters in China (first- and
second-tier cities), Hong Kong, Macau, Singapore and Taiwan, down from 90 at the end of March.
Questions & Answers
Q.What were the main reasons cited for Moiselle International's revenue decline in Hong Kong and China?
What were the main reasons cited for Moiselle International's revenue decline in Hong Kong and China?
In Hong Kong, retail sales were negatively impacted by a fall in mainland tourists and high rents. In China, a general economic slowdown dampened consumer sentiment, affecting sales across the region.
Q.Despite increased losses, what positive financial trend did Moiselle International report?
Despite increased losses, what positive financial trend did Moiselle International report?
Moiselle International reported a healthier gross profit margin, which rose to 79 per cent. This was an increase from the 76 per cent gross profit margin achieved during the same period last year.
Q.What strategies did Moiselle International implement to address the difficult market conditions?
What strategies did Moiselle International implement to address the difficult market conditions?
The group rationalised its retail network, introduced cost-control measures, and adopted an online-to-offline business model. They also broadened their product range and launched exclusive VIP services for high-end customers.
Q.How did Moiselle International's store count change during the reporting period?
How did Moiselle International's store count change during the reporting period?
The group reduced its total number of stores and counters from 90 at the end of March to 84 by the end of September. This involved closing underperforming outlets and relocating some shops.