Cosmetic retailer Sasa is considering slowing its expansion in the China mainland due to lack of experienced staff to support its growth.

Sasa has suffered a HK$19.7 million loss in the mainland market which is blamed on the opening of 13 Sasa store with insufficient human resources.

“In mainland China, our strategy and operations are undergoing growing pains. Staff training has not yet matched our pace of expansion,” Sasa said.

Sasa made its first foray in the mainland when it opened two stores in Shanghai in 2005. Three years ago, the company announced plans to open 100 stores across the mainland by 2011, however, it has opened only 39 stores to date, having strained its talent pool.

“Apparently, the company lacks experienced staff to support its fast growth. Slowing the pace of shop openings would certainly solve this problem,” said Eugene Mak, analyst, Core Pacific-Yamaichi Securities.

Sasa International says it will review its plan for store openings and its expansion methodology. The company will also focus more on its existing stores in the markets it entered.

In its home market, Sasa continues to perform well, posting a 35 per cent year-on-year increase in sales revenue from its 86 Sasa stores in the two territories, Hong Kong and Macau.

GB