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Tag: Veeko

  • Colourmix parent Veeko International warns of substantial lossColourmix parent and fashion retailer Veeko International has warned shareholders of a “significant increase” in its loss for the half year to September 30. A year ago, the company finished the half HK$19 million in the red, but chairman Johnny Cheng did not estimate the degree of loss in his profit warning issued yesterday. He said the loss was due to “decreased sales for both the cosmetics and fashion segments of the group as a result of the increasing tension of the Sino-American trade war and the further depreciation of Renminbi during the period, which resulted in the continued weakness of the retail environment and abatement in consumption sentiments”. Notably, he did not refer to the social unrest which has adversely affected Hong Kong retailers since early June. But Cheng did say another factor in the loss was a provision for onerous contracts of underperforming retail stores. Veeko International will release its interim results before November 30.

    Colourmix parent Veeko International warns of substantial lossColourmix parent and fashion retailer Veeko International has warned shareholders of a “significant increase” in its loss for the half year to September 30. A year ago, the company finished the half HK$19 million in the red, but chairman Johnny Cheng did not estimate the degree of loss in his profit warning issued yesterday. He said the loss was due to “decreased sales for both the cosmetics and fashion segments of the group as a result of the increasing tension of the Sino-American trade war and the further depreciation of Renminbi during the period, which resulted in the continued weakness of the retail environment and abatement in consumption sentiments”. Notably, he did not refer to the social unrest which has adversely affected Hong Kong retailers since early June. But Cheng did say another factor in the loss was a provision for onerous contracts of underperforming retail stores. Veeko International will release its interim results before November 30.

    Colourmix parent and fashion retailer Veeko International has warned shareholders of a “significant increase” in its loss for the half-year to September 30.

    A year ago, the company finished the half HK$19 million in the red, but chairman Johnny Cheng did not estimate the degree of loss in his profit warning issued yesterday.

    He said the loss was due to “decreased sales for both the cosmetics and fashion segments of the group as a result of the increasing tension of the Sino-American trade war and the further depreciation of Renminbi during the period, which resulted in the continued weakness of the retail environment and abatement in consumption sentiments”.

    Notably, he did not refer to the social unrest which has adversely affected Hong Kong retailers since early June.

    But Cheng did say another factor in the loss was a provision for onerous contracts of underperforming retail stores.

    Veeko International will release its interim results before November 30.

  • Veeko buys New Territories retail store

    Veeko buys New Territories retail store

    Veeko International has sealed a deal to buy a retail property in the New Territories, with an eye to converting it into one of its own stores.

    Veeko – which owns its namesake fashion brand along with Wanko, and the Colourmix and Morimor cosmetics-store chains – has paid HK$117.5 million to acquire the ground floor of 88 San Hong Street North in the New Territories. The 833sqft space is currently occupied by Yue Fung Dispensary Co, paying $248,000 a month until its lease expires on December 31, 2020.

    The company says that while the retail space is currently tenanted, “upon the expiry of the existing tenancy agreement, the group shall evaluate the benefit of continuing leasing of the property against the benefit of using the property as the group’s store”.

    Savills has independently valued the space at $120 million.

    The transaction is scheduled to be completed by June 18.

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  • Colourmix axes stores to stop losses

    Colourmix axes stores to stop losses

    Colourmix parent and fashion retailer Veeko has seen its sales fall 4.4 per cent in the last year, to HK$1.928 billion.

    But it posted a $5.26 million profit, a turnaround for the previous year’s $25.9 million loss – all due to an increase in the value of investment property.

    Veeko said its cosmetics division’s sales, which accounted for 82 per cent of group revenue, slipped 1.9 per cent, with gross profit margin easing 1.1 per cent to 31.7 per cent.

    Sales in its fashion division slumped 14.2 per cent to $354.45 million, but gross profit margin improved to 70.1 per cent.

    The cosmetics business lost $6 million for the year and the fashion business lost $8.2 million, but an increase in fair value of investment properties of $31.6 million pulled the overall business to a paper profit.

    At the end of March, Veeko operated 84 Colourmix stores, six fewer than a year earlier, and eight Morimor stores, (up one). The Colourmix stores are primarily in Hong Kong, with five in Macau and one in Mainland China. It opened the first Morimor store outside Hong Kong in November, at The Venetian Macao Resort.

    “It is expected that the market presence and popularity of Morimor stores will be further enhanced through its brand new image in quality and trendy cosmetics,” the company said in its results announcement.

    Fashion business

    As at the end of March, Veeko had 101 fashion stores trading under the Veeko and Wanko banners in Hong Kong, Macau and Mainland China, a reduction of 18. This was partly due to the company exiting Singapore, closing its five stores there.

    The group has 25 stores in Mainland China where it closed four underperforming outlets during the year. It also has a presence on Tmall.

    Looking ahead, Veeko says it expects the Hong Kong retail market to continue to improve gradually.

    “Under the challenging environment, the group is cautiously optimistic about its future development, and will continue to seek opportunities for growth and monitor closely the changes in market trends.”

    The company says it will continue to adjust its store portfolio and review rental levels.

    “Given the downward adjustments of rental rates for certain stores in the market, the rental pressure for stores with expiring lease terms will be reduced, and the group will achieve better results in controlling rental costs. Meanwhile, the group will close down underperforming cosmetics stores and identify prime locations with lower rents for new stores in order to improve overall operation efficiency.”

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  • Veeko International flourishes despite downturn

    Veeko International flourishes despite downturn

    While its peers suffer from Hong Kong’s lacklustre market, one retailer has achieved a stunning sales boost.

    Veeko International operates 82 Colourmix and one Morimor cosmetics stores and 155 fashion stores in Hong Kong, Macau, Taiwan, Singapore and Mainland China under the Veeko and Wanko brands.

    For the six months to September 30, Veeko International recorded a turnover of HK$1.066 billion – an increase of 23.6 per cent on the corresponding period of last year. Its cosmetics business increased sales by 33.7 per cent over the same period last year, accounting for 77.6 per cent of Veeko’s turnover. Sales in the fashion business slipped two per cent.

    Profit attributable to shareholders reached HK$41.488 million – up 14.9 per cent on last year, driven by a 56.2 per cent increase in profit from the cosmetics business. The fashion business, meanwhile, recorded a $2.68 million loss, a 133.6 per cent downturn on the profit of $7.97 million for the same period last year, largely due to exchange rate losses from overseas markets including Taiwan, Singapore and Mainland China. At constant exchange rates the division would have recorded a profit.

    Veeko says it will continue to expand its Colourmix store network, having added six in the first half.

    A large part of the success of its cosmetics operations is an increase in the average sale from $358 per transaction for the same period last year to $377 per transaction for the current period, – a year-on-year increase of 5.3 per cent. The gross profit margin of cosmetics business for the

    period was relatively unchanged at 35.7 per cent.

    Veeko’s fashion store network was down by a net 19 stores due to a revision of its store networks in Singapore, China and Taiwan.

    Veeko says Hong Kong and Macau accounted for 78.8 per cent of the group’s total fashion retail turnover. Sales in the two territories rose 6.2 per cent year on year, but gross profit margin decreased by 1.7 percentage points to 71.8 per cent.

    Taiwan fashion sales fell 24.9 per cent, due to the closure of eight stores, leaving it with 25 in the market. But same store sales grew by 6.4 per cent.

    In Singapore, sales slumped 26.6 per cent, largely due to the closure of four stores, leaving it with just nine there. Same store sales in local currency slipped 2.6 per cent.

    And in China, turnover fell 19.4 per cent, due to a net reduction of 10 stores, leaving it with 41.

    Veeko says it expects the challenges faced by the retail business will continue during the next half year, with cautious consumption sentiments.

    “The group… believes that opportunities exist alongside with challenges. In an environment which is full of challenges, the best policy is to uplift our competitiveness and lay a good foundation for sustainable growth in the future by maintaining healthy growth of the core business in the long run.”

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