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Hong Kong Challenges Drag Down Jeweler TSL
Jun 27, 2021 10:01 AM
By Rapaport News
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RAPAPORT... Revenue at Tse Sui Luen (TSL) fell during the full fiscal year, as coronavirus-related challenges in Hong Kong and Macau outweighed a recovery in China.
Group revenue dropped 9% to HKD 2.65 billion ($341.6 million) for the 12 months ending March 31. Sales in mainland China climbed 9% to HKD 2.16 billion ($278.7 million. However, that rise could not offset a 50% decrease to HKD 423.6 million ($54.6 million) in Hong Kong and Macau.
“Both Hong Kong’s and Macau’s retail sectors rely heavily on tourist footfall and spending,” the company said last week. “The absence of tourists due to Covid-19, coupled with the yearlong containment measures and the postponement or cancellation of weddings, have led to weak consumer sentiment and domestic demand for fine jewelry, which in turn caused the group’s sales in Hong Kong and Macau to plummet.”
The company reported a loss of HKD 44.1 million ($5.7 million) for the full fiscal year. That figure was an improvement from the previous 12 months, when trade disputes, protests and the pandemic all drove a loss of HKD 89.8 million ($11.6 million). To curb the impact of the closures and travel restrictions during the year, TSL implemented several cost-saving measures, including negotiating lower rental payments, temporarily closing stores and shortening operating hours to minimize overhead, it noted. It also closed several stores in Hong Kong.
Sales in markets other than greater China fell 16% to HKD 62 million ($8 million) during the period.
The company believes the current challenges will continue into the new fiscal year.
“The rollout of Covid-19 vaccination programs around the world seems to be the ‘light at the end of the tunnel’ that the retail industry had been desperately waiting for,” the company said. “However, the path to a sustainable recovery is long as mass vaccination takes time and travel restrictions will remain in place to a certain extent in the near future. The economic stability, consumer sentiment and tourism recoveries are still facing strong headwinds from the Covid-19 variants.”
To combat the long road to recovery, TSL intends to focus more on strengthening its e-commerce channels, it added.
Image: A TSL store in Hong Kong. (Wpcpey)
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Tags:
China, COVID-19, Hong Kong, Jewelry, Rapaport News, Tse Sui Luen, TSL
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