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Chow Sang Sang Sales Drop Amid Covid-19 Wave
Aug 28, 2022 9:43 AM
By Rapaport News
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RAPAPORT... Sales declined at Hong Kong-based retailer Chow Sang Sang in the first half of 2022, when a fifth coronavirus wave hit consumer spending across greater China.
Group revenue slid 7% year on year to HKD 10.09 billion ($1.29 billion) for the six months, the jeweler reported Thursday. Retail sales slipped 1% to HKD 9.67 billion ($1.23 billion). Other revenue, mainly from property investments, slumped 60% to HKD 1 million ($133.7 million).
Lockdowns in major Chinese cities such as Shanghai reversed some of the progress the company had made during the festive period earlier in the year, management explained. The addition of new stores helped offset this. In Hong Kong, government measures forced many stores to suspend operations.
“The recurring Covid-19 outbreak continues to plague the group’s business performance,” the company said. “Sales in mainland China, Hong Kong and Macau performed well in the 2022 Chinese New Year period, but a new wave of outbreak followed, with strict social distancing measures in some major mainland China cities stifling consumer spending and paralyzing retail in Hong Kong and Macau.”
Retail sales in mainland China were flat at HKD 7.16 billion ($913.1 million). In Hong Kong and Macau, they fell 5% to HKD 2.4 billion ($306.3 million). Group profit dropped 13% to HKD 467.5 million ($59.6 million).
Performance improved in the latter part of the first half, with mainland China returning to year-on-year growth in June. From April onward, sales in Hong Kong benefited from the government’s policy of distributing spending vouchers to consumers, the company added.
“There is momentum leading into the second half of 2022,” the retailer added. “The pandemic and global political instabilities still pose uncertainties for the business…The nature of the ongoing Covid-19 pandemic means the ups and downs of seasonal retail sales will be far more unpredictable than in the past.”
However, the company said it would maintain its current strategies, which include expanding its retail network and making use of omni-channel retail.
“Planning and execution have been structured in a more agile and flexible mode in order to mobilize the necessary resources in a timely manner,” it continued. “We will continue to proactively pursue our store expansion, but more cautiously and selectively.”
Image: A Chow Sang Sang store at Hong Kong International Airport, November 2015. (Shutterstock).
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Tags:
China, Chow Sang Sang, COVID-19, Hong Kong, lockdowns, macau, mainland china, Rapaport News, shanghai
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