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Tag: Saint Honore

  • Circle K Hong Kong sales boosted by digital

    Circle K Hong Kong sales boosted by digital

    Digital and creative marketing strategies have been credited for rising sales at Hong Kong Circle K and Saint Honore stores in the first half of this year.

    Parent Convenience Retail Asia says the combined operations achieved sales of HK$2.574 billion and drove core operating profit up 16 per cent to $81 million in the six months to June 30.

    “The robust results were mainly due to effective eCRM programs for Circle K and Saint Honore as well as encouraging performance in developing businesses, particularly the new fast-fashion eyewear business Zoff,” the company said.

    The group’s O2O business model which synergises Circle K’s OK Stamp It – eCRM app (driving online to offline traffic) and Circle K’s bricks-and-mortar store network (driving offline to online traffic), achieved a significant membership milestone, exceeding 1.1 million people and generated “a strong increase in comparable-store sales”.

    In a commentary accompanying the results, CEO Richard Yeung Lap Bun said Convenience Retail Asia would continued to follow its ‘Three Plus’ strategies to achieve growth: focusing on smartphone-savvy ‘internet+’ customers; delivering the ‘4P’s+’ of exceptional products, promotions, places and pricing; ‘plus’ a great customer experience; and reinforcing its transformation into a ‘brick-and-mortar+’ O2O enterprise.

    The group closed two Circle K Hong Kong stores during the period, and opened two, taking its network to 332. First-half sales for the chain rose 4.4 per cent, contributing total sales of $2.061 billion, largely driven by the OK Stamp It eCRM platform.

    “OK Stamp It uses a special app to deliver promotional deals and loyalty program offers to members. It is a proven tool for marketing the group’s latest products, services, contests and premiums, and a valuable customer loyalty platform that drives online traffic into in-store traffic and repeat purchases. It also enables family members and friends to share their activities on their favourite social media,” he said.

    In April, the group launched a three-stage summer promotion for OK Stamp It members. First was the return of the popular Shake Shake Lucky Star game, which gave members the chance to win one of 100 Samsung Galaxy S9 smartphones; the second was a collaboration with Zoff, which offered free sunglasses for the first 1000 members who purchased all nine selected items of newly imported ice cream brands from Japan and Korea; and the third was a World Cup-themed game with 100 grand prizes of Cathay Holiday coupons valued at HK$10,000 each.

    “Launched less than two years ago, OK Stamp It has already become one of Hong Kong’s leading eCRM platforms,” said Yeung.

    Saint Honore Cake Shop

    At the end of the period, Convenience Retail Asia had 103 Saint Honore stores in Hong Kong and Macau, five more than at the same time a year earlier. It has another 33 in Guangzhou and Shenzhen.

    “Although our bakery operations saw stagnant growth in comparable store sales in Hong Kong over the first six months of the year, total turnover grew on the back of key contributions from the opening of new stores in Hong Kong and an increase in festive product sales,” said Yeung.

    However, gross profit margin was eroded by the appreciation of the renminbi, which caused surges in raw material and labour costs.

    Zoff grows

    Convenience Retail Asia opened its second store operating under the Japanese eyewear brand Zoff during the half year.

    Zoff currently carries more than 1200 SKUs of frames and there are plans to expand this to more than 2000 SKUs, which Yeung says will strengthen product variety and differentiate the brand from competitors even more.

    The second store opened on February 23 at Telford Plaza in Kowloon Bay.

    Meanwhile, the company’s other developing business, FingerShopping.com achieved stable turnover.

    As at the end of June, Fingershopping.com featured some 25,000 SKUs from more than 1700 brands on its e-commerce platform.

    “Beauty and personal care continued to be the anchor category, representing 64 per cent of total gross merchandise volume and the team will continue to build variety within the site’s primary categories and seek strategic partners to boost new traffic,” said Yeung.

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  • Circle K Hong Kong parent focused on digital to boost growth

    Circle K Hong Kong parent focused on digital to boost growth

    Despite a challenging business environment, Circle K Hong Kong parent Convenience Retail Asia reports comparable-store sales growth last year driven by digital initiatives.

    Leading the way were O2O customer-relationship management (CRM) programs, with membership for “OK Stamp It” (Circle K) and “Cake Easy” (Saint Honore) exceeding 1 million and 300,000 respectively.

    Group revenue was up 4.6 per cent to HK$5.09 million. The core operating profit rose 7.4 per cent to $182,594 while net profit grew by 7.7 per cent.

    During the year, the group’s O2O digital retailing platform FingerShopping.com saw moderate growth in gross merchandising volume (GMV). It also achieved high pick-up and payment rates at Circle K stores in Hong Kong and Macau. Beauty and personal care continued to be the anchor category, representing about 70 per cent of total GMV.

    Turnover for the convenience-store business grew 5.4 per cent to $4.05 billion, with comparable store sales up 4.2 per cent. Turnover for the bakery business increased 1.9 per cent to $1.09 billion, with comparable store sales in Hong Kong growing 5.2 per cent.

    Gross margin and other income as a percentage of turnover increased 0.3 points to 36.9 per cent despite keen competition in the retail market and high manufacturing costs.

    At the end of December the group had 332 Circle K stores, with 10 opening in Hong Kong and nine being closed.

    Eighteen months after its launch, “OK Stamp It” has attracted more than 1 million members and won industry awards for excellence.

    At the end of December, the group had 102 Saint Honore cake shops in Hong Kong and Macau. Thirteen stores were opened and nine closed during the year. There were also 41 Saint Honore locations in Guangzhou and Shenzhen.

    The digital CRM program “Cake Easy” had more than 300,000 members by the end of the year.

    During the year the group obtained the franchise for Japan’s fast-fashion eyewear chain Zoff, opening the brand’s first store in Hong Kong.

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  • Convenience Retail to offload Circle K Guangzhou

    Convenience Retail to offload Circle K Guangzhou

    Convenience Retail Asia, the Hong Kong-listed operator of Circle K convenience stores and Saint Honore Cake Shops in Hong Kong, Macau and Guangdong province, has reported a 36.8 per cent decline in first half year profit.

    While sales increased 5.8 per cent in the half year to HK$2.368 billion, labour and raw material costs increased, reducing its gross margins, and it incurred substantial investment costs in its eCommerce business.

    Along with its results, the company announced it would sell its stake in the loss-making Circle K Guangzhou business to its controlling shareholder and focus on the Circle K business in Hong Kong and Macau. Fung Holdings (1937) Limited will pay CRA HK$104.5 million for its share of the business.

    “The sale of the Circle K Guangzhou will help to create positive momentum for the Group’s financial performance in a difficult retail and economic environment that continues to place pressure on the results of the group,” said Richard Yeung, CRA CEO.

    “This sale, which will also result in a one time gain ($50 million), underlines our focused commitment to delivering long-term growth, profitability and shareholder value.”

    In the half year, turnover for the Circle K business increased 5.7 per cent to HK$1.902 billion, with comparable store sales rising 8.8 per cent in Hong Kong and 2.6 per cent in southern China.

    Turnover for Saint Honore Cake Shops rose 5.5 per cent to HK$498 million, with 4.1 per cent growth in comparable stores sales in Hong Kong. Core operating profit of the group decreased by 34.6 per cent to HK$42 million and net profit declined by 36.8 per cent year on year to HK$31 million.

    During the first half, the group incurred higher expenditure to support intensive marketing campaigns for its e-commerce platform FingerShopping.com, and because of investment in a pilot programme launched in late 2014 with Sinopec Marketing. The pilot program manages 10 petrol stations in addition to Easy Joy convenience stores on behalf of Sinopec Marketing in Guangzhou. Excluding the Projects expenses, core and net operating profit would have decreased, respectively, by 18.5 per cent to HK$57 million and by 16.1 per cent to HK$45 million.

    Gross margin and other income as a percentage of turnover decreased slightly by 0.8 per cent to 36 per cent compared to the same period in 2014, due to rising raw material prices and factory labour costs. Operating expenses as a percentage of turnover increased from 33.9 per cent to 34.2 per cent because of the higher operating costs as well as increased marketing and investment expenditure in projects.

    “Our ability to drive higher comparable store sales despite adverse external conditions is also a reflection of our unwavering commitment to excellent customer service, in-demand products and services, and timely, effective marketing,” Yeung added.

    “We believe these indications of strong brand equity and customer loyalty will be invaluable once the retail sector begins to improve. However, we anticipate that higher costs and declining spending will continue to affect our operations for the remainder of 2015.”

    Yeung said the company’s online consumer platform, FingerShopping.com, continued to make encouraging progress in the first half of the year. Health and beauty is the platform’s most successful anchor category.

    “FingerShopping.com is enjoying increasing customer loyalty and continues to expand its product roster, which includes a number of popular brand names. The group is now testing FingerShopping.com’s delivery services in Guangzhou and has also secured partnerships with leading Hong Kong banks as well as promotional campaigns with major retailers in Hong Kong.”

    CRA says it expects the retail market to remain weak in the foreseeable future and operating costs are likely to remain high.

    “We are trying our best to mitigate the adverse market conditions through our exit from the convenience store business in Guangzhou while continuing to invest in FingerShopping.com, strengthening our operations to retain talent, delivering first-rate customer service and driving cost efficiency,” Yeung concluded.