Fashion
CEC International Holdings (0759), which operates 759 Store outlets, recorded a net loss of HK$29.9 million for the six months to October, a reversal from the HK$8.1 million net profit that it made a year earlier.
Loss per share was 4.49 HK cents in its fiscal first half against earnings per share of 1.21 HK cents a year earlier.
Revenue fell 14.2 percent to HK$1.1 billion from HK$1.3 billion.
The firm blamed the local market’s weakness, leading to a 13.3 percent decline in its retail business to HK$1 billion.
It said total retail sales value in Hong Kong has declined for 20 consecutive months, but its retail business is still expanding, specifically the number of its retail stores and warehouses. Thus, revenue growth was below expectation and did not fully offset rising costs.
CEC International said it incurred a foreign exchange loss of HK$22.3 million due to the yen’s appreciation against major currencies from the fourth quarter last year until the latest reporting period. In contrast, it made an exchange gain of HK$19.4 million in the same period last year.
Chairman Lam Wai-chun said it will set “die-hard defense” as a target of its retail business in the second half.
It will consider rent-to-sales- performance ratio and the reasonable distribution of location of its 70 to 80 branches, the leases of which are due to expire by the end of next year.
CEC International said it expects to close down or revamp 13 branches in the second half. By October, it plans to open five new branches and merge two outlets.
It will also terminate the lease of one of its major warehouses for retail logistics in 2017.
It will either turn 759 Kawaii outlets for cosmetics and personal care products into 759 stores or close them.
