Friday, March 29, 2024
 
Columnist
Martin Hennecke
 
BONJOUR HOLD
HKEx Stock Code : 00653 
 
Corporate Profile
Principally engaged in the retail and wholesale of beauty and health-care products and operation of beauty and health salons in Hong Kong and Macau and the PRC.

Business Review - For the year ended December 31, 2012

Expanding our market share in retail and wholesale services through enhanced brand image

Over the past 21 years, we have been facing with different opportunities and challenges. However, Bonjour has been unwaveringly sticking to its primary goal of offering our customers with a wide range of value-for-money and superb-quality goods and services by exuding a pioneering spirit in trendy creativity. The present-day ¡§Bonjour¡¨ brand name has received widespread recognition, which is a testament to both our great breadth of vision and insight in framing marketing strategy and our notable success in winning strong confidence from customers. According to the official figures released by the Hong Kong Tourism Board, the total number of visitor arrivals to Hong Kong from around the world in 2012 hit a recordbreaking height of over 40 million, representing a year-on-year growth of 16%, which was far beyond the expected growth of 5%. The growth was mainly driven by the substantial increase in single-day visitor arrivals. Visitor arrivals from China to Hong Kong have reached more than 34,900,000, accounting for about 71.8% of the total visitor arrivals to Hong Kong. This indicates that China had a growing consumption population, which has in turn added fuels to the development of Hong Kong's retail sector. Thus, against the backdrop of the global economic sluggishness and the significant surge in operating costs such as rents along with the inflation in the territory, Bonjour was able to achieve desirable profit during the Year under review by putting great efforts on operations and introducing technology beauty and skin care products in line with the trend of development.

During the Year, turnover from the retail and wholesale segment jumped by 9.8% to HK$2,504,800,000 (2011: HK$2,280,600,000), accounting for more than 89.2% of the total turnover. Segmental profit of the division increased by 1.1% to HK$215,000,000 (2011: HK$212,600,000, as restated). The continued growth in turnover was mainly driven by the increase in visitor arrivals from China, the Group's sound product portfolio and the prudent expansion strategy of our retail stores network. Segmental gross profit margin increased to 41.6% (2011: 39.6%). The increase was mainly due to the improvement of product mix and the roll out of exclusive high-quality products with higher profit.

Retail network in Hong Kong and China

As at 31 December 2012, Bonjour operated 44 (2011: 48) retail stores in Hong Kong, China and Macau.

We adhered to a prudent expansion strategy of retail store network. Our direction was to proactively seek for stores with high operating efficiency and reasonable return, rather than merely focusing on stores with unreasonably high rents. The Group reaped desirable gains from the retail income, reflecting that the Group had followed a right strategic direction. In addition, the pleasing performance in gains was mainly due to the increase in the number of transactions between customers in Hong Kong and China and the significant growth in transaction amount, especially in 2012. Fuelled by the macro-economic development, coupled with the improvement of Chinese consumers' purchasing power and their standard of living and consumption habits, we expect that the turnover will maintain growth in the coming years. At the same time, with continued efforts on strengthening the professional training for employees, we ensured that our employees had been capable of providing customers with quality services, thus further expanding our retail network and consolidating our position in the retail market. Hence, we had reached our goal of yearly sustained growth.

Rents

During the Year, rents for stores in Hong Kong were maintained at high level. Bonjour entered into and secured certain leases for its existing stores last year. There was an increase in the rent-to-turnover ratio for the retail and wholesale segment, reaching 13.7% (2011: 12.1%). However, with our excellent management expertise, even in the face of the pressure of rising rents, we were still able to control rental expenditure at an acceptable level. In the coming year, the Group will keep in pace with the situation, and will continue to look for more costeffective stores. We will carry out our expansion plans actively yet prudently, in an effort to strike a balance between sustainable development and rising rents.

Online store

With the increasing popularity of online shopping in the present-day society, Bonjour allocated greater resources to the development of online stores. Since the commencement of the operation of Bonjour's online shopping service (website: www.bonjourhk.com) in 2005, positive responses had been received from consumers overwhelmingly. Turnover from our online store jumped by 13.9% to over HK$43,400,000 during the Year under review. To stay ahead of the global online shopping trend, we are stepping up the launch of online shopping services, with a view to better meeting the strong demand from the market.

Marketing efforts

During the Year, marketing expenditures of the Group's retail and wholesale segment amounted to HK$44,200,000 (2011: HK$33,900,000), representing an increase of 30.4% over last year. Contrasting to such extent of increase, there was no significant increase in the marketing expenditure to turnover ratio, evidencing that our marketing strategy had enabled us to effectively achieve the expected turnover growth. To timely keep abreast of the latest market trends, we rolled out high-quality products with extensive popularity on the one hand, while promptly adhering to the emerging trend of technology skin care products on the other hand, with a vision to meet different needs from the market. Bonjour is well aware the importance of marketing, brand value creation and pedestrian flow attraction. We will thus reinforce our marketing and branding efforts, while tapping into more customers through the launch of a wide diversity of new promotion initiatives. We made a success in carving out higher visibility of the Group in Hong Kong and Chinese market, thus adding favourable impetus to the enhancement of our long-term brand image and the promotion of our business development in China.

We had previously invited a number of celebrities including Miss Shu Qi and Miss Rosamund, Kwan Chi Lam to take part in our brand ambassador event. Enthusiastic responses had been obtained from consumers. With the event, the Group's brand value and excellent products were successfully spread among customers. In the past year, to highlight Bonjour's philosophy of ¡§beauty¡¨, celebrities including Miss Ada, Choi Siu Fan, Miss Jade, Kwan Sum Yin and Miss Eliza, Sam Lai Heung were invited to participate in Bonjour's brand ambassador event with a theme of charming personality. Although marketing expenses so incurred has resulted in an increase in operating costs, the Group believes that the investments in marketing efforts will bring operational efficiency in the long run. We will thus continue to make these investments.

With our penetrative sensitivity of the market and passion for creativity, we endeavour to frame effective marketing strategy for over 200 patent licensed brands through a variety of different media, thereby successfully strengthening our brand awareness in the market.

Giving a touch of stylish charm, fascinating glamour

In recent years, there is fierce competition in the beauty industry, where there is an increasing number of beauty salon peers of different sizes. However, the indispensable importance of reputation to each and every peer in the beauty industry is beyond suspicion. Therefore, the provision of an entire range of superb-quality, highly-sophisticated and total-satisfaction services is a crucial key for Bonjour Beauty to win customers' patronage. Our beauty parlors are committed to providing all skin care services customers with a graceful and comfortable environment, while offering them with the most fabulous experience of suitable beauty services, which are of their preferences. At the same time, the persistent use of high-quality beauty products by us has further bolstered up customers' confidence. Up until now, the Group has been operating in the beauty services horizon for over a decade. In particular, ¡§About Beauty¡¨, ¡§Dr. Protalk¡¨ and ¡§Top Comfort¡¨ have successfully contributed to the building of ¡§Bonjour¡¨ brand into a high-quality trademark.

For the Year, the beauty services segment recorded a turnover of HK$303,000,000, representing an increase of 8.0% when compared to HK$280,600,000 in last year. Segmental performance was pleasing, reflecting that the economies of scale of this business segment of the Group had been further enhanced. The Group has thus overshadowed all its peers in this respect.

Beauty services network

During the Year, the Group continued to extend the coverage of the beauty services network by adding 5 beauty parlors, including the newly-opened flagship store with an operational area of 20,000 square feet in Causeway Bay, a bustling district in Hong Kong. As of 31 December 2012, Bonjour was operating 15 ¡§About Beauty¡¨ beauty parlors in Hong Kong, Macau and China and 6 auxiliary services beauty salons. A more diversified range of services, including medical beauty, life beauty, slimming beauty, skin care, foot massage and cosmetic dermatology services, was provided. Meanwhile, we strengthened the Chinese health services. Our ¡§About Beauty ¡V Health Preservation Centre¡¨ provides customers with a comprehensive range of Chinese medicine services, ranging from Chinese medicine nursing, health preservation and body conditioning, pain treatments to reproductive health. The Group is committed to enhancing self-confidence of customers who are in pursuit of beauty. Applauses were gained from our members and customers. Accordingly, we are have better positioned ourselves to set up professional, reliable beauty parlors that cater for all needs of customer. Despite high costs and intensive peer competition associated with the operation of beauty services, the essential key to stand out from peers in the competition lies in an optimal balance between the growth in the number of stores and their relative economies of scale. Therefore, while exercising strict cost control, we expect that the cost-effectiveness of the newly-opened stores will be reflected on the returns generated by our beauty parlors this year.

Marketing efforts

With easy access to enriched beauty information from different sources in recent years, consumers are becoming very selective in the purchase of beauty services and products, and are increasingly pursuing for sense of freshness. To cater for these changes and to improve the competitive strengths, Bonjour provides customers with a variety of brand new beauty items.

In line with our constant self-enhancement, we strive for exploring into new knowledge and tapping into new technologies. During the Year, in addition to ¡§About Beauty¡¨ beauty parlors which are well recogized by customers and ¡§Dr. Protalk¡¨ which is committed to promoting the concept of medical beauty and providing high-quality beauty services and skin care products, the Group had further stepped up its brand building. Miss Sharon, Chan Man Chi and Miss En Jel were appointed by us as brand ambassadors in Hong Kong and South Korea respectively, with an aim to exchange beauty culture, as well as to share and promote the joy of beauty.

With promotion creativity favour, together with a series of promotional activities of unique conception, the Group had uplifted the gross profit margin of the beauty services segment and increased brand awareness.

Business Outlook - For the year ended December 31, 2012

Amid the slowdown in the global economic growth, the central government took active leaps to fuel domestic consumption and stimulate economic growth. Hong Kong will continue to benefit from the favourable policies put in place by the central government, and to be embedded with promising market prospect and immense business opportunities. Bonjour will put great efforts to further expand the market share in China, to attract more customers, and to maintain a stable growth in results performance.

Invigorated by China's economic boom, with the improvement in people's living standards along with the rapid economic development, people increasingly prefer goods with high quality and internationally-recognized brands. With reliable product quality and reasonable price, Bonjour receives much praises from people. In the coming year, the Group will continue to better cater for the changes in the global economy and the needs of the retail market in Hong Kong and the Greater China region. We are committed to providing consumers with marvelous shopping experience. To achieve this goal, the Group will continue to allocate more resources on marketing and branding, and take a balanced marketing strategy to promote our brand and create a professional image, in order for us to enhance customer patronage and to better serve the services need of customers.

On the other hand, with the increasing importance of online shopping in today's society, we will continue to allocate more resources to develop an online store, in order to offer customers with enjoyable shopping experience in a relatively convenient way of shopping and at relatively value-for-money prices. In view of the continued improvement of the function of online shopping and the launch of more diversified marketing campaigns, the Group believes that the online store will generate greater revenue contribution to the Group's overall business.

To further optimize the structure of products and increase the level of profitability, the Group will therefore introduce more high-margin exclusive products and enhance the grades of product portfolio. We will make a move to add self-brands and exclusive distribution agency brands. This move will enable us to increase the gross profit margin of the Group, while leading price trends and providing consumers with excellent services and value-for-money consumption experience. At the same time, we always regard the quality of our products and services as an important asset. While strengthening R&D and innovation efforts on products, we are committed to providing our high-quality staff with training on the provision of professional services to customers. This is a crucial key for our long-term business development.

In the coming year, Bonjour will continue to unveil its store opening plans based on the market conditions. We will add 3 to 5 new retail stores and 1 to 2 beauty parlors in Hong Kong, Macau and Mainland China. The implementation of these plans will be subject to adjustments, depending on the changes in the economic environment. The opening of retail stores will enable us to attract more customers, and also beef up our brand awareness. ¡§Bonjour¡¨ brand name will gradually receive broader awareness, which will in turn help increase the revenue of the Group in the near future. We will continue to actively step into further expansion and capture business opportunities. With judicious business operations and strategic expansion plans, the Group will further achieve an overall profitability of higher level. We firmly believe that our shrewd and steady investment will be the key for our success, and will enable us to effectively establish a solid foundation for our business in China.

Beauty services industry is an important part of the services industry in Hong Kong. With greater emphasis on appearance among Hong Kong people, the beauty industry turns into boom cycle of swift development. Beauty services are related to professional craftsmanship. The industry is in more robust demand for talent pool and on-the-job staff training. With the evolvement of Hong Kong into a knowledge-based society, the explosion and popularity of information technology and the general improvement of the level of knowledge, consumers are becoming smarter than ever before. Bonjour has very high professional requirements in this aspect. In the long term, we believe that it is essential for the beauty services industry to take on an internationalized, professionalized dimension. Beauticians should place equal emphasis on both theory and technology, in order for them to strengthen the level of technology and to enhance the quality of beauty services. Along with the flourishing development of medical beauty, life beauty and slimming beauty in Hong Kong and China, there is a wider range of beauty products and greater varieties of instruments. In the meantime, Bonjour has established Chinese medicine health and beauty ¡§About Beauty-Health Preservation Centre¡¨, which offers customers with a wide variety of choices. We will seize the right opportunity to expand the business in this horizon. As mentioned above, the Group's is fully confident of the development of the Chinese market. Also, we will endeavour to formulate new strategy for the expansion of the beauty services network in the China market.


There were adjustments in retail consumption patterns in both Hong Kong and China in 2013. Benefiting from the structural transformation of China's visitor arrivals, consumption from the third and fourth-tier cities has grown sharply. Products of affordable prices will continue to receive much popularity. Last year, the overall sales performance of the daily necessities market is stable. Bonjour offers a wide range of daily cosmetics and skin care and beauty products in more than 22,000 varieties. With an adequate supply, we are able to meet people's consumption patterns. Thus, sales in Hong Kong and China remain strong, and are less sensitive to the impact of the macro-economic environment.

The Group recognizes that the Chinese market is rich in opportunities. It adheres to a longterm goal of expanding into the Chinese market. In the coming year, while strengthening our market position in Hong Kong, we plan to step up market development in a couple of spectrums. We intend to expand the retail and wholesale network in China, and enrich the range and quantity of products, in an effort to play a more active role in the Chinese wholesale market and to expand its market share. In this way, the Group will be well-positioned to strengthen the existing customer base and to offer a diversified range of high-quality services on a sound basis.

Bonjour believes that the creation of core corporate values is fundamentally essential to the development of vivid, vibrant retail business operations. We are in unswerving pursuit of beauty, regardless of the fluctuations in the economic environment. With edges in scale and economic benefits, the Group offers preferential prices for customers, and becomes one of the most popular beauty retailers. Looking ahead to the future, visitor arrivals of China and the sentiment in the retail market are expected to record continued growth. With the gradual improvement in the level of spending power of the Chinese consumers, there will be stronger consumption demand for a wide range of cosmetics and beauty products. The Group will continue to reap maximum returns for shareholders of the Company (the ¡§Shareholders¡¨) diligently and unwaveringly. With the enduring support and trust from Shareholders and the dedicated efforts of all of our staff, we will be well-positioned to achieve this goal.

Source: Bonjour Hold (00653) Annual Results Announcement
Chairman IP, Chun Heng, Wilson Issued Capital (shares) 2,991M
Par Value HKD 0.01 Market Capitalisation (HKD) 4,457M
 
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