Sa Sa eyeing residential stores as losses hit $242m
Sa Sa International (0178) yesterday said its interim loss rose more than five-fold to HK$242 million compared to a HK$36.5 million loss in the previous period.
The cosmetics retailer also said it might close more stores in tourist hotspots and open outlets in residential areas.
In the six months ended September, excluding the provision for impairment in retail store assets of HK$46.1 million, Sa Sa lost HK$201.8 million in continuing operations. The basic loss per share was to 7.8 HK cents and no interim dividend was declared.
Its turnover for operations decreased by 62.1 percent to HK$1.29 billion.
Sa Sa recorded a loss of HK$239 million in the Hong Kong and Macau market, compared to a loss of HK$3.3 million in the same period last year.
Sales of retail and wholesale in Hong Kong and Macau slumped by 70.4 percent to HK$856 million. Same-store-sales were down 66.9 percent from a year ago.
Retail sales in Hong Kong fell 68 percent to HK$671 million. Local consumer sales fell 19 percent and the group will focus on local consumer business in the next few months.
Mainland sales fell 10 percent to HK$117.3 million. Same-store-sales based on the yuan were down 1 percent.
However, e-commerce sales rose 9.5 percent to HK$186.1 million. Turnover from the O2O business amounted to HK$37.5 million and accounted for 20.2 percent of the turnover of the e-commerce business, compared with nearly zero levels in the previous period.
The group's rental expense was HK$150 million less compared to the same period last year. A further 21 shops are subject to lease renewal this financial year.
Chairman and chief executive Simon Kwok Siu-ming expects the border between mainland and Macau will only reopen in the Lunar New Year at the earliest and that Sa Sa was looking at closing more stores in the tourist areas which had high rents in the second half of the year.
Kwok said rents in the tourist hotspots should be cut from 50 percent to 70 percent, otherwise Sa Sa would consider closing stores. However, he said Sasa will open stores in residential areas to attract local customers.
Store numbers in Hong Kong and Macau dropped by 12 to 106. It had 231 stores at the end of September, 13 less than a year ago.