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Jeweler TSL Suffers from Hong Kong Slowdown
May 23, 2017 6:02 AM
By Rapaport News
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RAPAPORT... 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 (HKD 3.41 billion) 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 (HKD
2.07 billion), partially offsetting a 23% slump in revenue from Hong Kong and
Macau, which came to $167.1 million (HKD 1.3 billion). 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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Tags:
China, Hong Kong, Jewelry, mainland china, Rapaport News, retail, TSL
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