Struggling Le Saunda warns of yet another loss

Late last month, embattled Hong Kong-based shoe retailer Le Saunda announced its third consecutive annual loss. Yesterday it flagged yet another, at least for the first half.

In a stock-exchange filing, Le Saunda’s board advised that during the three months to May 31, the group’s self-owned offline retail business saw same-store sales decline 32.7 percent and total sales down 38.2 percent, due to widespread store closures in the last year. Online sales fell 16.4 percent.

While nonspecific about the scale of the loss in the current half-year, chairman James Ngai said the results would be impacted in part by a US$5 million redundancy bill related to the closure of its factory in Shunde, Guangdong last month. The company is now contracting out all production to third-party suppliers.

However the result was largely caused by the coronavirus pandemic, he said. “The expected net loss is primarily attributable to the significant decrease of the group’s total retail sales due to the adverse impact on the retail market that brought by the outbreak of Covid-19 epidemic since late January.”

As at the end of May, Le Saunda had 414 retail outlets trading in Mainland China, Hong Kong and Macau, 72 fewer than a year earlier. The majority – 368 – were self-owned stores, the balance franchised outlets on the mainland.

During the first half of last year, Le Saunda was showing signs of improvement, recording a profit of $337,000, however in June ongoing protests inHong Kong saw retail sales decline as shops were often shuttered and inbound mainland tourist numbers declined.

Le Saunda trades under the brands Le Saunda, Linea Rosa, Pitti Donna and CNE.