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Tag: CNE

  • Le Saunda closes stores as profit goes red

    Le Saunda closes stores as profit goes red

    Struggling shoe and accessories retailer Le Saunda has shuttered more than 100 stores on Mainland China in the last year as it tries to reduce overheads and return to profit. Group sales fell 14.4 per cent in the first half of this year, to RMB 460.4 million, (US$66.1 million), gross profit margin slipped 3 per cent and the company recorded a loss of RMB 9.6 million (US$1.4 million), compared with a profit of RMB22.9 million in the same period last year.

    The company blamed a slowing of retail sales in Mainland China for its poor result, with same-store sales down 10.2 per cent, as well as a decline from the closure of unprofitable stores.

    On the mainland, Le Saunda shuttered 96 of its self-run stores, cutting its network back to 549 and a further eight franchised outlets were closed, leaving a total network of 611.

    In Hong Kong and Macau, where sales rose 4.5 per cent, it closed one store leaving 10.

    Le Saunda chairman James Ngai said the company’s reduced gross profit margin was a result of lowering prices to meet market demand. The growth rate of fashionable ladies’ footwear sector had “slowed down significantly” on the mainland, Le Saunda’s core market, he said.

    “With a change in customers’ buying behaviour, the e-commerce segment experienced rapid expansion, striking a tremendous hit on the sales of traditional retail stores.

    “To cope with the ever-changing market environment, the group is fully committed to enhancing product quality, promoting a new pricing model, enhancing consumers’ shopping

    experience and thereby improving same-store sales,” said Ngai.

    “Facing the challenges posed by the economic environment, the group is determined to [return] to the basic principles of retailing, which include adjusting the pricing strategy, closing down low-profit stores, and actively exploring its franchise and wholesale businesses.”

    With Hong Kong and Macau sales up, totalling RMB 30.7 million, Ngai said the group would pursue growth there “in a proactive yet prudent manner and establish new stores in desirable locations”.

    Le Saunda designs manufactures and retails shoes and accessories under the Le Saunda,

    Linea Rosa, Pitti Donna and CNE brands.

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  • Le Saunda sales continues to fall

    Le Saunda sales continues to fall

    It has been a year of losses for fashion group Le Saunda Holdings, which designs, develops, makes and retails women’s and men’s footwear handbags and accessories.

    Total Le Saunda sales fell by 17.2 per cent for the year ended February 28, reaching RMB1.13 billion (US$176 million), while consolidated gross profit dropped by 18.1 per cent to RMB743.5 billion.

    During the year, the retail channel through department stores in Mainland China remained feeble, says the group. Both topline Le Saunda sales and like-for-like sales fell. The group recorded a gross profit of RMB743.5 billion, a decline of 18.1 per cent, while the gross profit margin shrank to 65.8 per cent, down 0.7 points.

    The company sells in Mainland China, Hong Kong and Macau, its major proprietary brands being Le Saunda, Le Saunda Men, Linea Rosa, Pitti Donna and CNE.

    ‘Many challenges’

    During the year, the group initiated a series of promotional and brand marketing campaigns to mark its 40th anniversary. It also launched online leisure brand Pitti Donna.

    Le Saunda says the growth of total retail sales on consumer goods slowed down in China during the year, still presenting many challenges for traditional retail businesses.

    “In particular, the rapid development of e-commerce posed the greatest threat, and the fierce competition among traditional retail businesses resulted in extensive close-downs and tenancy surrenders.

    Because of the economic challenges, the group adjusted its strategy to close down low-profitability stores and re-adapted the e-commerce model. At the end of the year, the group had a retail network of 687 stores in Mainland China, Hong Kong and Macau, a net reduction of 109 outlets. The number of self-owned stores dropped by 101, while the number of franchised stores decreased by eight.

    At year-end, there were 493 core brand Le Saunda stores and 35 Le Saunda Men stores,
    representing net reductions of 70 and 17 stores respectively. There were two fewer stores for its high-end fashion brand Lina Rosa, taking the total to 72 stores, while there was a 21 drop in CNE stores, ending up with just one.

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