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Tag: Tse Sui Luen

  • Tse Sui Luen warns of loss due to Covid-19 outbreak

    Tse Sui Luen warns of loss due to Covid-19 outbreak

    Tse Sui Luen (TSL) has warned it will report a loss for the fiscal year, with sales hampered by a sluggish retail environment in greater China.

    The Hong Kong-based jeweler expects a loss of at least HKD 80 million ($10.3 million) for the year ending March 31, it said last week. That compares with a profit of HKD 54 million ($7 million) the previous year. The company based the projection on its performance during the first 11 months of the fiscal year.

    The slowdown, which began in July, is the result of a number of factors including the US-China trade war and prolonged social unrest in Hong Kong, TSL said. The COVID-19 outbreak has also impacted sales.

    “The coronavirus outbreak in January 2020 has taken a heavy toll on the retail industry, dealing a severe blow to the Hong Kong and mainland China economies,” the company noted. “The group’s turnover was [affected] further by the weakest overall sales in February 2020, the traditional peak season of the retail industry…which is expected to drop by approximately 88% year on year.”

    In an effort to cut costs, TSL has negotiated rent reductions with landlords, and plans to close some of its stores, it added.

    The company will publish its full-year results by the end of June.

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  • Triple-whammy sees jeweller Tse Sui Luen post US$11.6m loss

    Triple-whammy sees jeweller Tse Sui Luen post US$11.6m loss

    Tse Sui Luen Jewellery has reported a US$11.6 million loss attributable to shareholders for the year to March. Sales declined by 28.3 percent to $376 million. The previous year the company turned a profit of $7 million.

    The company cited the trade dispute between the US and China, which weakened consumer sentiment in the company’s main markets, followed by social unrest on the streets of Hong Kong from June and then the “devastating” impact of the arrival of Covid-19 from the end of last year, for the disappointing result.

    Tse Sui Luen responded by negotiating rent relief with landlords, minimizing staff costs and administrative expenses, and streamlining its store network.

    Chairman Annie Yau said that in addition to those steps, the group adjusted its product portfolio and marketing strategies to stimulate sales and lowering its inventory level to reduce holding costs. The company’s payroll reduced from 3300 to 2870 during the year to March.

    During the year, the turnover of Hong Kong and Macau retail businesses decreased by 44.6 percent and same-store sales fell by 41.6 percent.

    The group opened four new stores in Hong Kong – at Tsim Sha Tsui, Tung Chung, Nam Cheong, and North Point – stores it had committed at the beginning of the year, prior to the social unrest and coronavirus pandemic.

    “In the face of the exceptionally high rentals in Hong Kong, following negotiations, many landlords have offered us rental cuts to help us tide over the current tough operating period, though far from comparable to our decrease in sales. We will keep on negotiating with landlords for further rental concessions as and when required,” said Yau.

    Self-run stores on the mainland recorded a year-on-year decrease of 20.8 percent in sales and same-store sales fell by 21.3 percent. The company opened 12 new self-operated stores and 78 new franchised stores, but there was a net gain of just 10 stores for the year as poor-performing outlets were shuttered.

    Sales in Malaysia grew by 19.3 percent through the year, despite the nationwide retail shutdown to halt the spread of Covid-19 from mid-March. The company now has six stores there, the newest at Mid Valley South Key Megamall.

    Online sales grew 17.2 percent during the year, boosted by a presence on marketplaces including JD, Tmall, Taobao and HKTV Mall, and growth of its own direct-to-consumer site.

    “As the retail landscape transforms, we believe that e-business will become a significant and sustainable source of revenue for the group,” said Yau.

  • Tse Sui Luen ready to take hefty loss

    Tse Sui Luen ready to take hefty loss

    Jeweler Tse Sui Luen is projecting a loss of HKD 80 million (US$10.3 million) for the year to March – a stark reversal from last year’s net profit of HK$54 million ($6.96 million.

    In a profit warning issued to the Hong Kong stock exchange, the company said its estimate was based on a review of the accounts for the first 11 months of the financial year, and other information available.

    Sales in February fell by 88 percent as Hong Kong’s borders all but shut, and without the benefit of Lunar New Year turnover, which last year largely fell in February.

    “Such expected loss is mainly attributable to the sluggish retail sales since July,” the company’s chairman Annie Yau On Yee said.

    “The coronavirus outbreak in January 2020 has taken a heavy toll on the retail industry, dealing a severe blow to the Hong Kong and Mainland China economies already hampered by the prolonged local social unrest in Hong Kong and escalated US-Sino trade tensions.”

    Yau said Tse Sui Luen was mitigating the economic fallout from the social unrest in Hong Kong and the global coronavirus epidemic, with measures such as negotiating rent relief with landlords, which “have helped improve the group’s cost-effectiveness to a large extent”.

    “We have also streamlined our business operation to minimize all costs and expenses, and are restructuring our retail store network including store closures for maintaining profit contribution at a sustainable level,” she said.

    “The board believes that we are well-positioned to weather the current unfavorable environment.”

    Full-year results are scheduled for release in late June.

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  • Tse Sui Luen profits plummet as Hong Kong protests impact sales

    Tse Sui Luen profits plummet as Hong Kong protests impact sales

    Tse Sui Luen profits plummeted in the first half as Hong Kong protests took their toll, especially during the September quarter.

    The company, which operates stores under the TSL banner, has reported a 14 percent year-on-year decline in sales to HK$1.6552 billion  ($US211 million) while Tse Sui Luen profits attributable to shareholders fell by 94 percent to just $1.6 million ($204,000).

    Chairman and executive director Annie Lau said the year to date has been challenging for all businesses operating in Hong Kong, where TSL’s sales fell by 23.9 percent in the half-year and same-store sales were down by 26.4 percent.

    “The outbreak of citywide protests and social unrest in Hong Kong in June has, when combined with the downward economic pressure being felt from the protracted US-China trade tensions and Renminbi depreciation, all conspired to devastate our retail business in Hong Kong.”

    She said the depreciation of the Renminbi has reduced spending by mainland visitors, impacting Hong Kong sales, and shrunk earnings from Mainland China businesses in Hong Kong dollar terms, (where the company is listed).

    “While the US and China have resumed trade talks, the economic outlook remains gloomy and shrouded in uncertainties as a trade consensus continues to appear beyond reach.”

    Lau said the social unrest since June has weakened local consumer sentiment and the protests have made it challenging for retailers to operate.

    “The hardship the local retail industry is facing is likely to persist or even worsen in the remainder of this financial year.”

    She said the company was continuing to optimize its store network in Hong Kong and work with landlords to reduce its rental costs.

    In Mainland China, TSL sales through self-operated stores were down by 8.5 percent overall and same-store sales fell by 7.5 percent, “mainly attributed to the protracted US-China trade war with tit-for-tat tariffs”.

    During the six months, seven new self-operated stores and 41 new franchised stores were opened, taking the Mainland China network to 448.

    “Going forward, we will take a cautious approach and optimize our retail network in Mainland China with the volatile market conditions being taken into consideration,” said Lau.

    Meanwhile, TSL has now expanded its Malaysia store network to six after opening at Mid Valley Southkey Megamall in April. Sales there were up 16.5 percent.

    On a more positive note, TSL’s e-commerce business grew by 27.7 percent year on year.

    “We believe that this sector will grow to be a significant source of revenue for the group going forward,” said Lau. “Encouraged by the great response received from the group’s official website for Mainland China, we are working on developing an official website for Hong Kong and establishing our online presence on e-business platforms in order to further facilitate the online-to-offline and offline-to-online retail practice.”

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  • Social unrest, trade tensions erodes Tse Sui Luen profits

    Social unrest, trade tensions erodes Tse Sui Luen profits

    Weak consumer sentiment based on “social unrest” in Hong Kong and the ongoing Sino-US trade tension has cost Hong Kong-listed jeweler Tse Sui Luen a cut of more than 90 percent in its half-year profit.

    In a profit warning, chairman Annie Lau said a preliminary review of the company’s management accounts for the six months to September 30 show a 14 percent decrease in turnover.

    “The group has recorded the weakest sales in its Hong Kong market in the months of August and September … which is expected to drop by approximately 45 to 55 percent year on year. Given the challenging and uncertain market conditions on our retail business, the group is expected to record a significant decrease in the profit attributable to the owners of the company for the six months … by more than 90 percent as compared with that for the corresponding period last year.”

    She said the company has introduced cost-saving measures and applied “more proactive operating tactics” to weather the current unfavorable economic and business environment.

    “We are negotiating with landlords for rental relief or reduction, in particular for shops situated in the key areas of the social incidents in Hong Kong, and managing our rental and staff expenses as well as general and administration costs at a stable and reasonable level with respect to the business performance. At the same time, we have formulated plans to lower our inventory level to reduce the holding cost, and adjust our product mix and marketing strategies to stimulate sales,” she said

    “We will continue to monitor the relevant economic conditions and the ever-changing retail landscape, including cost pressure and the increasing downward pressure of the domestic economy.”

    Lau reassured shareholders that the company’s financial position remains healthy with sufficient cash on hand to meet its business needs.

    The half-year results for Tse Sui Luen Jewellery are expected to be released by the end of November.

  • Tse Sui Luen store network expands Again

    Tse Sui Luen store network expands Again

    Hong Kong-headquartered jeweller Tse Sui Luen has reported a 9.6 per cent increase in profit for the full year, despite a marginal 1.7 per cent drop in group turnover.

    Profit attributable to shareholders was HK$54.2 million (US$6.9 million) on sales of $4.065 billion ($521 million).

    The Tse Sui Luen store network grew by 56 during the year, to reach 473.

    Chairman Annie Yau said sales rose in the first half of the year, reflecting the continuing upturn of Hong Kong’s retail sector. “However, conversely, towards the end of the year, the group started to feel the trickle-down effects of the trade dispute between the US and China which has adversely affected the market sentiment and consumer confidence and resulted in the depreciation in the Renminbi – all leading to a slowdown in the global economy and in local retail sales performance.”

    She said the fluctuation of the Renminbi value inevitably brought adverse impact on the second half. “The group is responding to these challenges with unique signature products and reinforcement of our market positioning as ‘Wedding Expert’, all aimed to offset the negative effects…”

    During the year, the group has demonstrated its vision to optimise its retail network across Asia and broaden its international presence through new store openings in Hong Kong, Mainland China and Malaysia. Going forward, we will continue to seize the opportunities for developing existing and new business channels and expanding our retail network in all the regions where we operate, while being cautious and keeping a close watch on any and all changes as and when they occur in the market,” she says.

    Same-store sales growth in Hong Kong and Macau was 2.8 per cent, and as a result of gold product promotions and an expanded product assortment, the average amount per invoice rose by 5.6 per cent.

    Tse Sui Luen took advantage of a general downward trend in store rental rates to improve rental cost effectiveness. It expanded the size of its stores at Times Square in Causeway Bay and Plaza Hollywood in Diamond Hill and opened a new store in MCP Central (Phase II) in Tseung Kwan O.

    Self-operated Tse Sui Luen store growth continued to be a key driver of the group’s Mainland China business, accounting for 36.6 per cent of its turnover during the year. Twelve new self-operated stores and 43 new franchised stores were opened on the mainland, expanding the network from 380 to 435.

    “We will keep on expanding our retail network in Mainland China with the intention of opening an additional 100 new stores over the coming two years,” said Yau.

    In Malaysia, turnover was stable the jeweller opened one new store, at Genting, taking its network there to five.

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  • Tse Sui Luen Jewellery sales rise boosted by tourist

    Tse Sui Luen Jewellery sales rise boosted by tourist

    Tse Sui Luen Jewellery sales and profit both rose in the first half year – but the company has tempered the good news by expressing concerns about the impact of the US-Sino trade war. Chairwoman Annie Yau said in a stock exchange filing that the improved retail sentiment in Hong Kong since September last year due to increased numbers of mainland tourists and growing consumption appetite of local customers, the city’s retail market has continued to progress “in an L-shape”.

    “However, the recent outbreak and escalation of trade dispute between China and the US has cast some doubts on the economic outlook for both the global and local economies going forward. One consequence has been the devaluation of Renminbi during the period, which could bring certain influence to our business in Hong Kong and Mainland China during the remainder of this financial year.

    “While it is still too early to conclude the actual impact on the group’s performance, we will continue to take a cautiously optimistic approach in our major operating regions, namely Hong Kong and Mainland China,” said Lau.

    Tse Sui Luen Jewellery sales increased by 10.2 per cent to HK$1.91 billion in the six months to July (the company has changed its financial year to September, so comparative figures are based on the six months to August 31 last year).

    Profit attributable to owners of the company increased by 38.9 per cent to $24.3 million.

    Sales in Hong Kong and Macau rose by 15.3 per cent during the half year, while same-store sales growth for all businesses in the territories rose 14.8 per cent. Retail rentals in Hong Kong remained static and “at a more reasonable level than that experienced in past years”, allowing the company expand its retail business in the city and enlarge the shop area of some of its existing stores, including those in Times Square in Causeway Bay and Plaza Hollywood in Diamond Hill.

    “We will continue to identify other suitable high-traffic shopping arcades and on-street stores in order to further penetrate tourist and residential precincts as applicable,” said Lau. “Nevertheless, the ongoing manpower shortage situation in Hong Kong remains a concern in setting the pace of expansion. In respect to Macau, due to a steady increase in tourists from Mainland China and their spending powers, our business in Macau achieved an increase of 8.7 per cent in turnover during the period.”

    In Mainland China, where its self-owned stores account for 37.3 per cent of Tse Sui Luen Jewellery sales, sales rose 4.2 per cent, but fell 3.5 per cent on a same-store basis. The company is expanding its network of franchised stores, adding 25 during the period taking the number to 207. After adding 197 self-run stores, Tse Sui Luen now has 404 outlets on the mainland.

    In Malaysia, Tse Sui Luen has five stores, including the latest to open in Genting. Sales rose 13.9 per cent.

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  • Tse Sui Luen makes big mainland expansion plan

    Tse Sui Luen makes big mainland expansion plan

    Hong Kong Jeweller Tse Sui Luen (TSL) has moved to target the Chinese middle class, according to a report.

    TSL has announced plans to open 100 outlets in the Chinese mainland within two years, taking its total number of stores to 487.

    The firm’s deputy chairman and chief strategy officer Estella Ng Yi-kum commented that “Even though the yuan is on a downward trend, we have strategies to adjust pricing and use product designs to fit the appetite of our customers to boost sales.”

    She said that China will be “the growth engine for TSL for the coming 20 years,” attributing this to the rise of the Chinese middle class, which is expected to flourish under changes planned for China’s tax code.

    Ng did admit to concerns about the weakening of the RMB making TSL products more expensive for Chinese shoppers in Hong Kong and devaluing TSL’s assets in China comparative to the US Dollar-pegged HKD. The firm will address these issues strategically by potentially raising prices in China and focusing on smaller, more profitable diamonds.

    “We use design to make a 0.3 carat diamond look like half a carat,” Ng said. “So we can have a good margin and attract customers.”

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  • Tse Sui Luen Jewellery to open 100 new stores in China

    Tse Sui Luen Jewellery to open 100 new stores in China

    Hong Kong jewellery retailer Tse Sui Luen (TSL) plans to open 100 stores in China over the next two years after solid growth in its existing store network.

    It currently has 380 stores on the mainland, including 193 self-operated stores and 187 franchised shops. As well as planning new sites, TSL says it is focusing less on department stores there and more on malls in line with consumer shopping patterns.

    Announcing a 21.3 per cent increase in sales group-wide for the last 13 months, and a 113.2 per cent increase in profit attributable to shareholders, TSL said it was also open to expanding its store network in Hong Kong as suitable opportunities presented themselves.

    “Continued expansion of our retail network in all our operating regions is one of our key objectives both now and going forward,” the company said in its results announcement.

    “With a cautious approach to monitoring the rental level and identifying appropriate business partners for our franchising business, we were delighted by the healthy growth in our store network in Hong Kong and Mainland China.”

    Total sales for the 13 months (the group changed its financial year-end date from February 28 to March 31 this year) were HK$14.137 billion. Profit was $49 million.

    In its home market of Hong Kong and Macau, TSL achieved a 19.5 per cent overall increase in same-store sales as tourists from the mainland returned to the territories.

    Thanks to gold product promotions and enrichment of the brand’s product assortments, the average amount per sale increased by 20.3 per cent. TSL opened two new stores in Hong Kong, in New Town Plaza in Sha Tin and Yoho Mall in Yuen Long.

    Mainland China

    TSL says a growing demand for “daily jewellery products” and the continuing emergence of the middle class creates an opportunity to continue to develop its Mainland China business.

    “Our self-operated stores continue to play a significant role as the group’s growth engine accounting for 39.3 per cent of the group’s turnover. However, … due to the shift of consumers away from department stores to shopping malls, we are undergoing a transition in the repositioning of our retail network to focus more on shopping malls and less on department stores.”

    Despite the change, the company managed to maintain its sales at similar levels to last year and same-store sales growth was 10.4 per cent, (including the effect of an extra month in the figures).

    Malaysia

    The company also operates four stores in Malaysia, where sales grew 48 per cent. “We remain positive about this business and will continue to expand further in appropriate locations when opportunities present themselves,” the company said.

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  • Jeweler Tse Sui Luen Suffers from Hong Kong Slowdown

    Jeweler Tse Sui Luen Suffers from Hong Kong Slowdown

    Sales and profit at jewelry retailer Tse Sui Luen (TSL) weakened in the past fiscal year, as improved demand in mainland China failed to compensate for sustained sluggishness in Hong Kong.

    Revenue fell 3.6% to $438 million in the 12 months that ended February 28, the Hong Kong-based jeweler reported Tuesday. Profit dropped 2.6% to $3 million (HKD 23.2 million).

    “A continuing reduction in tourists visiting Hong Kong from mainland China, together with the ongoing instability of both the global and local economic and political environment, conspired to create unfavorable consumer sentiment for the group’s retail outlets during the year,” the company said.

    The devaluation of the Chinese yuan, as well as slower economic performance on the mainland — resulting from uncertainty about US trade policy — dented Chinese consumer confidence, the retailer explained. This in turn hampered the Hong Kong tourism industry, it added.

    Even so, sales in China jumped 15% to $265.5 million, partially offsetting a 23% slump in revenue from Hong Kong and Macau, which came to $167.1 million. The group had 28 self-operated stores in Hong Kong and three in Macau at the end of February, while its store network on the mainland consisted of 198 self-operated outlets and 132 franchised stores.

    Despite the stronger performance in mainland China, the company will take a “prudent” approach there, particularly given the lack of clarity over the US government’s policies, it added. The group plans to keep costs under close control and work to reduce the number of days it takes to replenish inventory.

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  • Tse Sui Luen battles the downturn

    Tse Sui Luen battles the downturn

    A shift in focus away from the high end has partly buffered jeweller Tse Sui Luen from the Hong Kong luxury downturn.

    The group has released trading figures for the first half year revealing a decrease in turnover of just 3.6 per cent to HK$1.753 billion. While the decline was attributable to the slump in Hong Kong luxury retailing and the reduced spending by Mainland tourists, Tse Sui Luen defied the downward sales trend thanks to strong growth in its Mainland China franchise business.

    Nevertheless, the profit attributable to owners of the company declined by 40.2 per cent from HK$25.8 million to HK$15.5 million.

    “Due to the growth in our high-end luxury segment in China slowing down, we shifted our focus to the development of the self-consumption market and high craftsmanship gem-setting jewellery in the premium mass market,” explains chairman and CEO Annie Yau Tse.

    “Thanks to the right strategy and an expanded franchise network, we saw the same store sales growth from Mainland China was 2.3 per cent while the whole business grew by five per cent in the region.”

    Tse says the company’s sales in Malaysia grew by 14 per cent in the first half year prompting plans to open one or two more retail stores in the market during the forthcoming year.

    In Hong Kong and Macau, says Tse, the number of tourists from Mainland China dropped in the first half and their spending on luxury products and higher-priced gifts decreased. Instead of buying luxury goods, these customers turned towards more popular commodities in the mass markets.

    “As a result, the sales in Hong Kong and Macau for the period under review decreased by 19 per cent and same store sales growth was minus 20 per cent.”

    Despite the challenging market, the group opened two new stores in Hong Kong – one in Olympian City and the other in Plaza Hollywood, Diamond Hill in the first half. Another two new stores located in Tuen Mun and Wong Tai Sin were opened in October – aimed at local consumers who are end users in the self-consumption product segment.

    Tse Sui Luen says easing retail rents have resulted in a three per cent drop in the group’s rent spend for Hong Kong and Macau shops in the First Half.

    In Mainland China the group plans to increase the pace of store openings in order to better serve its customers. As of August 31, it had 169 self-operated stores and 56 franchised stores. By October 29, that had grown to 175 and 65 respectively, spread across 80 cities. The group plans more than 100 stores in Mainland China during the next two years.

    Tse believes the current market fluctuations in China and Hong Kong-Macau are “cyclical and transitory”.

    “In order to facilitate a more rapid growth of the group’s franchise sales network in Mainland China, we will continue to explore more opportunities to work with local business partners. We also expect our e-business channel to maintain its high growth rate in the second half of this year. We are cautious but confident that based on our solid foundation and the business know-how our experienced management team possessed, we will be able to mitigate the challenges of this cyclical downturn and create value for our shareholders.”