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Tag: Joyce Boutique

  • Joyce Boutique loses more from stagnant market

    Joyce Boutique loses more from stagnant market

    A stagnant luxury market has made it a tough half-year for fashion retailer Joyce Boutique Holdings, its interim results showing an HK$28.1 million (US$3.5 million) net loss.

    This follows a HK$16.6 loss for the same period last year.

    The group says its results were also impacted by low visitor traffic from Mainland China as well as the closure of shops in the previous financial year. This was mitigated by the inclusion of a $5.8 million write-back of an “onerous contract provision” made for the Joyce shop at Shanghai IAPM plus the savings in running costs.

    Turnover dropped by 19.4 per cent to $386.7 million for the six months. Gross margin also fell by 1.5 points, mainly a result of a higher number of warehouse outlet sales during the period.
    Hong Kong turnover dropped by 15.8 per cent and accounted for 88.7 per cent of group turnover.

    The division pushed out its operating loss from $8.5 million the previous first half to $27.2 million, primarily caused by the decline in turnover coupled with the drop in gross margin.

    With difficult trading conditions and the closure of loss-making shops in previous year, China turnover dropped 40 per cent, but with cost efficiencies and the contract write-back, the division managed to make an operating profit of $1.6 million, a turnaround from a $6.9 million loss for the same period last year.
    Loss contribution from the Marni JV business increased from $400,000 to $600,000, mainly because of a drop in turnover.

    In July, the group opened Joyce Beauty shop in Yuen Long Yoho Mall to extend its customer base to the West and North Territories and Shenzhen. At the same time, two non-performing shops were closed when their lease expired.

    The group says its expects the retail environment will stay challenging in the near term as online specialty fashion retailing continues to impact on its core retail business. Rental levels in prime shopping malls, meanwhile, remain high relative to turnover.

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  • Joyce Boutique plunges into the red

    Joyce Boutique plunges into the red

    Listed fashion boutique operator Joyce Boutique says it will continue to take a cautious approach to business expansion and focus on consolidation of the Joyce multi-label business towards higher-productivity stores in the year ahead.

    It will renovate and expand the Joyce flagship store in Central and relocate the Shanghai Joyce flagship store to a bigger space within Plaza 66 to introduce a completely new look and unique shopping experience to customers.

    The move follows revelation of a HK$34.9 million half year loss for the company – a major turnaround from the $32.8 million profit in the same period last year.

    Sales slumped 10.9 per cent, and gross margin lost 3.5 percentage points, the company has reported to the stock exchange.

    “The persistent fall-off in customer spending on luxury goods in Hong Kong and Mainland China drove down the sales performance of the luxury retail market in the period. Depreciation of the euro and yen against the dollar and renminbi led to an increase in overseas shopping and online shopping for luxury goods and impacted on bricks-and-mortar local retailing.” the company said in its interim report.

    Joyce Boutique’s Hong Kong, turnover dropped by 10.3 per cent against the same period last year and accounted for 82.5 per cent of group turnover (2014: 81.9 per cent). Further impacted by declined gross margin and increased rental costs, the Hong Kong division incurred an operating loss of $12.6 million for the period (2014: a profit of $36.6 million).

    Mainland China turnover declined by 14.6 per cent versus the same period last year and operating results turned into a loss of $22.9 million from last year’s profit of $3.1 million, chiefly the result of a general decline in turnover and margin and an additional $7.6 million provision made for a loss making shop in Shanghai.

    Joyce Boutique inside

    The joint venture with Marni made a loss contribution of $1.0 million (2014: profit of HK$1.3 million) due to a drop in turnover and an increase in operating costs.

    “In view of the difficult trading environment, the group adopted a cautious shop strategy. While opening new shops for three potential brands as planned in the previous financial year (the first Hong Kong shop for Thom Browne at On Lan St, the first China shop for Sacai at Beijing Sanlitun and the first Macau shop for Alexander Wang at Galaxy Macau), the group closed certain non-performing shops to improve shop productivity,” the company reported.

    As well as the change in store focus and the renovation of the Hong Kong and Shanghai flagships, the company says it plans to further strengthen customer loyalty and drive sales from VIP customers through enhanced personal stylist services and the introduction of private customer mobile apps.

    Joyce Boutique says it expects the near term trading environment will remain “tough and challenging”.

    “Rental levels in prime shopping malls remain high relative to turnover. Online shopping and overseas shopping for luxury goods will continue to impact on bricks-and-mortar specialty retailing. In view of the challenges, the group will focus on driving cost efficiency and shop productivity, fashion editing and reducing business risks through taking cautious approach to business expansion and stock purchase planning.”