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Tag: sa sa international

  • Sa Sa sales drops in HK, Macau

    Sa Sa sales drops in HK, Macau

    Sa Sa International sales slipped 2.2 per cent in the latest quarter, with same-store sales in Hong Kong and Macau down 3.7 per cent. The company says that while the transaction volume of mainland tourists rose 5.8 per cent in the three months to December 31, transactions by locals fell 5.2 per cent. However the average sale to tourists fell by 6.1 per cent and just 0.2 per cent to locals.

    Sa Sa International’s retail and wholesale turnover in markets outside Hong Kong and Macau (including Mainland China, Singapore, Malaysia and e-commerce) increased by 1.3 per cent in the third quarter.

    “[Hong Kong] consumer sentiment remained sluggish due to the weaknesses in RMB exchange rate and stock market under the continued shadow of the Sino-US trade war,” said chairman and CEO Simon Kwok in a stock exchange filing.

    “In addition, the new e-commerce law passed by the Chinese government in August came into force early this year and made daigou traders more cautious in running their businesses. The group’s sales performance was affected and negative growth was recorded in both retail sales and same store sales in the Hong Kong and Macau markets in November and December.”

    Kwok said that since the launch of the Hong Kong section of the Express Railway Link, the Group’s SaSa stores located in the Hong Kong West Kowloon station and the neighbouring Tsim Sha Tsui district have been reporting satisfactory sales performance. However, the increased influx of mainland tourists via the new Hong Kong-Zhuhai-Macau Bridge were mainly sightseeing trippers with limited purchasing power and barely contributed to the group’s overall sales in Hong Kong.

    “Nevertheless, the group believes the two mega infrastructure projects will attract more mainland travellers with higher consumption when they are gradually consummated. The group remains optimistic towards the outlook of Hong Kong and Macau markets in the middle to long run under the favourable development of the Greater Bay Area.”

    Kwok said Sa Sa International will strengthen promotional efforts to boost traffic and sales in physical stores to offset a decline in the online-driven daigou business.

    “Digitalisation and information technology enhancement will be sped up to improve operational efficiency and shopping experience. In addition, the group will seize the opportunities brought by the Greater Bay Area to achieve sustainable business development for the group,” he said.

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  • Sa Sa profits dive

    Sa Sa profits dive

    Sa Sa profits took a hit of 37.3 per cent for the six months to September 30.

    The Hong Kong-listed beauty products retailer’s interim results show turnover easing by 4 per cent to HK$3.628 billion (US$467.7 million) for the period, with retail sales in Hong Kong/Macau decreasing by 3.6 per cent to HK$2.9032 billion.

    Profit fell from $153 million to $96 million with its gross profit margin dropping from 42.9 to 41.2 per cent.

    During the six months, the group rationalised its retail network from 291 to 283 – six fewer Sasa stores and two fewer single-brand stores/counters.

    While sales fell in Hong Kong/Macau, the number of transactions rose by 0.2 per cent for local customers and 4.4 per cent for Mainland Chinese tourists. The value of each transaction, however, fell by 6.3 and 6.6 per cent respectively.

    Retail sales in Hong Kong continued to be weak, mainly because of average transaction values being lower. The company says the underlying reasons were a change in consumer preferences, a strong Hong Kong dollar and a depreciating yuan. Also, the policy change limiting Shenzhen residents’ multiple-entry permits to one visit a week has had a “significant” impact.

    However, Sa Sa reports an uptick toward positive growth in July as the company adapted with faster product launches, shorter product cycles and cheaper trendy products.

    Korean swing

    As an indication of market change, Sa Sa’s Korean product mix grew from 16.7 per cent of total sales to 23.5 per cent, and the parallel-imported product mix increased from 29.1 to 31.7 per cent. Sales for house brands dropped from 41.5 to 38.5 per cent.

    Overall turnover for Mainland China decreased by 4.3 per cent to $135 million, while same-store sales fell 5.1 per cent. The loss for the period amounted to $13.7 million. Profitability was impacted by the relocation of warehouses.

    Turnover for Singapore at $101.3 million was a drop of 11.1 per cent. As well as weaker sales, management issues impacted performance. While turnover was high, this created difficulties in retaining the knowledge base. However, a restructuring process has drawn on the resources of the relatively strong Malaysian management team.

    Malaysia’s turnover was down 19.1 per cent to $163.4 million, though same-store sales rose 11.2 per cent. Retail sales growth exceeded other markets thanks to the group’s strong retail network and effective marketing campaigns.

    Turnover in Taiwan fell by 23.1 per cent to $98.3 million, with same-store sales tumbling 19.5 per cent because of weak consumer sentiment and ongoing restructuring of the management team.

    Logistics problem

    In eCommerce, Sasa.com turnover reached $193 million, a dip of 0.1 per cent. Sales were affected by the appointment of a new logistics provider in April with the aim of increasing scalability. However, changeover difficulties resulted in a decision to return to the original service provider.

    “Significant numbers of orders had to be cancelled, and further costs were incurred by moving inventory back and forth as well as the running of two warehouses in parallel during the period,” says the company.

    Building on the growth of mobile internet use, the company launched a mobile app and started a collaboration with eCommerce platform Kaola in addition to its partnership with JD.com, Suning.com and T-Mall.

    On the mainland, the dynamics of the cosmetics market are changing with internet retailing growing at a rapid pace, says the company. Because of these challenges, it is continuing to strengthen management and recruit staff.

    “We are also seconding experienced staff from Hong Kong to improve the attractiveness of our product offerings and strengthen inventory management.”

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  • Sa Sa profit drop looms

    Sa Sa profit drop looms

    Sa Sa profit is expected to fall 35 to 45 per cent for the six months ended September 30.

    The Hong Kong-based cosmetics retailer has issued a profit warning, citing a drop in both sales and gross profit margin of its Hong Kong and Macau business, weaknesses in some overseas stores and decline in online profits.

    Meanwhile, the group has recorded a 2.3 per cent decrease in retail and wholesale turnover to HK$1910.9 million (US$246.3 million) for its second quarter.

    In other markets, including China, Malaysia, Singapore, Taiwan and Sasa.com), the group’s turnover fell 2.9 per cent. For Hong Kong and Macau, turnover was down 2.2 per cent to HK$1552 million, total sales easing by 2 per cent while same-store sales were 2.5 per cent down on a year-on-year basis.

    However, there was a 3.9 per cent rise in the number of transactions because of increased traffic growth. The number of transactions of Hong Kong and mainland customers rose by increased by 1.8 and 5.9 per cent respectively, while the average sales per transaction fell by 5.5 and 6.9 per cent respectively.

    Improved sales performances, says the group, were a result of its efforts to adjust product offerings to meet market demand. The resulting change in product mix intensified downward pressure on gross profit margin for the quarter.

    For the National Day Golden Week holiday from October 1 to 7, the group’s retail sales in Hong Kong and Macau had positive growth of 13.8 per cent, with same-store sales growing by 12.4 per cent.

    As at September 30, the group had a total 283 stores/counters, down from 288 at June 30. Hong Kong and Macau has 113 outlets (up one), China 53 (down two), Malaysia 68 (down one), Taiwan 26 (down five). Singapore was steady at 23 outlets.

  • Turnover falls for Sa Sa International

    Turnover falls for Sa Sa International

    Sa Sa sales are slowing, despite an improvement in Mainland Chinese visitor numbers.

    Retail and wholesale turnover for cosmetics retailer Sa Sa International Holdings fell by 5.7 per cent for the first quarter to June 30, according to unaudited data.

    Turnover dropped 5.4 per cent to HK$1384.9 million (US$178.585 million) in the Hong Kong and Macau markets, while same-store sales decreased by 4.8 per cent. While there were only slightly fewer transactions, their average value fell 5.7 per cent.

    In other markets, including China, Malaysia, Singapore and Taiwan as well as Sasa.com, retail and wholesale turnover dropped 7 per cent to HK$1717.1 million for the quarter.

    While still in decline, the group’s retail sales in Hong Kong and Macau recorded a notable improvement compared to the last quarter of the last financial year, the company attributing this to traffic growth of 2.7 per cent among mainland customers.

    “Their consumption continued to be on the weaker side, with spending declining by 6.4 per cent per transaction. Local consumption sentiment remained sluggish,” says the company.

    Improved sales performances were partially because of the group’s efforts to adjust product offerings to meet market demand.

    As at June 30, the company had 112 stores in Hong Kong and Macau, a drop of one from the start of the quarter. At 55, there were two fewer stores on the mainland, Singapore was steady at 23 stores, Malaysia’s 67 stores included had one more outlet, and Taiwan also lost a store for a total of 31. Overall, the company had 288 stores, down from 291.

    Sales performance during the period was affected by a series of factors, says the company, so the data for the period may not be able to reflect the overall performance of the reporting period.

  • Hong Kong January retail sales fall for 11th straight month

    Hong Kong January retail sales fall for 11th straight month

    Hong Kong retail sales, which suffered their worst decline in 13 years last year, saw weak sentiment extending into January on slumping tourist arrivals, weak local consumption and a strong local currency.

    Retail sales in January slid 6.5 per cent from a year earlier to HK$43.6 billion (US$5.61 billion) in value terms, compared with an 8.5 per cent decline in December. In volume terms, January sales decreased 5.2 per cent.

    “The near-term outlook for retail sales will remain constrained by the sluggishness in inbound tourism,” the government said in a statement. “External uncertainties, including a dimmer global economic outlook and US interest rate normalisation, may add further headwinds.”

    The value of retail sales fell for a second year in 2015 – down 3.7 per cent – the biggest decline since 2002 when they dropped 4.1 per cent.

    Hong Kong is confronting mounting economic challenges as the prospect of US interest rate rises drives fears of capital outflows that could put pressure on the financial hub at a time when China’s economy is growing at its slowest pace in 25 years.

    Tensions that have rocked the city, including protests over the Lunar New Year that was sparked off by street vendors, have added to the strains on the retail and tourism industries already suffering from a drop in mainland tourists.

    EXPENSIVE DESTINATION

    The strong Hong Kong dollar, which is pegged to the US dollar, has made the city an expensive destination and China’s cash-rich tourists are heading for more exotic destinations.

    Hong Kong tourist arrivals, which fell 2.5 per cent in 2015 in the first decline since 2003, dropped 6.8 per cent from a year ago to 5.23 million in January. Mainland visitors, which accounted for 77 per cent of the total, slumped 10 per cent to 4.04 million.

    Hong Kong’s comparatively high rents also hurt retailers as fewer mainland tourists come to shop, forcing operators to close and scale back expansion.

    January sales of jewellery, watches, clocks and valuable gifts in value terms fell 16.3 per cent, a 17th consecutive month of decline.

    Department store sales slid 3.6 per cent on year, against a 12.3 per cent drop the previous month. Wearing apparel fell 4.9 per cent while medicines and cosmetics decreased 3.6 per cent.

    Hong Kong’s top jeweler Chow Tai Fook Jewellery Group and cosmetics chain operator Sa Sa International Holdings saw sales declines at least 20 per cent during the key Lunar New Year shopping season in February.

    Department store operator Lifestyle International also saw a double-digit decline in sales during the holiday.

    Last week, Hong Kong rolled out a multi-billion dollar package of sweeteners to bolster its economy as a slowdown in China and rising political tensions deepen its economic woes.

     

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