Hong Kong luxury fashion retailer Moiselle has revealed a raft of innovative strategies to restore flagging sales.
Hit by a $31.9 million loss for the first half of the trading year due to declining spending by Mainland Chinese tourists, Moiselle is introducing new ranges and even flying in loyal customers for exclusive product displays.
The company has reigned in its store openings and is putting the squeeze on landlords to reduce rents.
Last week Moiselle revealed its sales had fallen by 21 per cent to $161.2 million mainly due to weak consumer sentiment and sluggish retail sales in its Hong Kong home market, which accounts for 55 per cent of its turnover. Gross margin fell from 82 per cent in the first half of last year to 76 per cent in the latest period.
The group operated 92 retail stores and counters in Hong Kong; first- and second-tier cities of China; Macau, Taiwan and Singapore as at September 30 – three fewer than at the end of March. It closed five stores in hong Kong during the six month trading period.
Moiselle – which sells under the Moiselle, Mademoiselle, Coccinelle and French-influenced Germain brands – has shifted focus to a more tailor-made sales model in Hong Kong, targeting members of its VIP customer club, and has formed partnerships with several Mainland Chinese online shopping websites.
The organised shopping visits by customers from Mainland China, Taiwan and Singapore to its product showrooms in Hong Kong target its most loyal customers with high spending power. The tours began in May and started generating income in July.
Meanwhile, Moiselle forged ahead with a strategy of diversifying its product offer to target different segments of the high-end and upper middle markets for women’s fashion apparel and accessories. It expanded its Moiselle and Germain ranges into menswear. It launched European accessories labels Sequoia and Coccinelle into the apparel market through exclusive distribution agreements to add impetus to its business development.
In its stock exchange filing, Moiselle said it did not expect Hong Kong’s retail market to turn around “any time soon”.
“China’s economy has shifted to a lower gear and the growing trend towards a higher proportion of the Mainland Chinese visitors with weaker spending power in Hong Kong seems irreversible. Moreover, the Hong Kong dollar, which is pegged to the greenback, is poised to enter a phase of appreciation against many other currencies as the US Federal Reserve Bureau looks set to raise the benchmark interest rate in the foreseeable future. These developments are likely to weigh on both the shopping tourism and average purchase value in Hong Kong, where the group derives most of its revenue.”
