Beauty chain issues profit warning
Cosmetics and healthcare products retailer Bonjour Holdings has warned shareholders its profits will be down this year.
The retailer blames disruption to the city’s commercial sectors by the Occupy Central protests of late last year and the widely recognised fall in tourism from mainland China.
Hong Kong-listed Bonjour said its net profit could decline by between 10 and 20 per cent year-on-year.
The company has more than 40 retail outlets, predominantly located in Hong Kong and Macau. Same-store sales growth across both cities fell by 1.6 per cent for the year to December 31.
It said the “most significant’ decline was during the fourth quarter which is traditionally a strong season for sales.
”The board considers the 79-day pro-democracy protest in Hong Kong which began in late September 2014 has affected the group’s retail sales performance in the fourth quarter, especially in the affected districts like Mongkok and Causeway Bay where our group has a number of stores located nearby,” Bonjour said in a filing with the Hong Kong Stock Exchange.
As other retailers, including SaSa, have already reported, there was a noticeable shift in the origin of mainland Chinese visitors to Hong Kong and Macau in 2014 – with the mix swinging to second and third tier cities where consumers have lower incomes than those from Beijing, Shanghai or Chengdu, for example.
Bonjour also noted increasing popularity of Korean beauty products, which in general are selling at a relatively lower price than higher-priced European or Japanese brands. This despite the apparent collapse of Missha’s Hong Kong and Macau retail operations at the beginning of January.