Property deal set to save Le Saunda’s bottom line

Hong Kong-listed shoe retailer Le Saunda says same-store offline sales rose by 13.8 percent in the February quarter after it rationalized its store network.

In a positive profit alert issued to the Hong Kong Stock Exchange, chairman James Ngai said group sales rose 5.2 percent year on year after a net 52 stores closed in Mainland China, Hong Kong, and Macau. As at February 28, the company had 389 outlets remaining, 347 of them self-owned across the three markets, and 42 franchised on the mainland.

The company said a preliminary review of its full-year accounts shows the company “may” have recorded a profit, which would mark a significant turnaround from a US$4.7 million loss in the prior year.

However, that was mainly attributable to the completion of the effective sale of its former factory in Shunde, Guangdong which it closed last May, and reached an agreement with the local government to hand back for $30 million. Le Saunda made a strategic decision to discontinue manufacturing and to contract production out to third parties.

While in-store sales are on the rise after several years of decline, Le Saunda’s e-commerce business continues to underperform, with sales down 8.4 percent year on year in the fourth quarter.