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Chow Sang Sang Sales, Profit Slide
Aug 29, 2016 9:46 AM
By Rapaport News
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RAPAPORT... Chow Sang Sang’s revenue slumped and profit tumbled in the
first half because of weaker consumer sentiment and a drop in tourist
spending in Hong Kong.
Revenue slid 16 percent to $1 billion (HKD 7.8 billion) in
the six months that ended June 30, the Hong Kong-based company reported. Jewelry retail sales, which constitute 88 percent of group revenue,
also dropped 16 percent to $885.9 million (HKD 6.87 billion).
The group’s Hong Kong and Macau business suffered the most from
the downturn, with sales diving 26 percent. The company does not expect the
environment to improve this year and will control inventory and reduce Hong
Kong floor space in line with this outlook. By contrast, the retailer plans to
open 22 new stores in mainland China, where trading has declined albeit at a slower pace.
“Continued softness in the property markets and the lack of
momentum in the stock markets in both Hong Kong and China kept consumer
sentiment in check,” the retailer said. “A strong Hong Kong dollar made Hong
Kong a more expensive place to visit, especially for mainland visitors.”
Profit plummeted 50 percent to $46.9 million, dragged down
significantly by the base effect of a $31.7 million gain recorded from a
disposal of shares in Hong Kong Exchanges and Clearing Limited in 2015.
Chow Sang Sang also said a surge in the price of gold of
more than 25 percent did not significantly boost consumer demand, despite such
hikes having that effect in recent years.
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Tags:
China, Chow Sang Sang, Hong Kong, Jewelry, Rapaport News, retail
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