Luxury fashion retailer Moiselle says Hong Kong’s retail market “may have bottomed” and is optimistic in its sales forecasts for the year ahead.
It is planning new brands targeting the middle market as it seeks to address the effects of changing spending patterns of Mainland Chinese shopping in Hong Kong.
Moiselle, listed on the Hong Kong stock exchange, sells its own house brands Moiselle, Mademoiselle and Germain and distributes Coccinelle and Sequoia, amongst others, in partnership with those international brands. It has more than 90 retail stores and counters in Hong Kong, first- and second-tier cities of China, Macau, Taiwan and Singapore.
“The group remains optimistic about the prospects of the market for women’s deluxe fashion apparel and accessories in the coming financial year, and believe that Hong Kong’s retail market may have bottomed and will recover following the one-off incident ‘Occupy Central’ campaign,” the company said in its annual results statement.
“Having considered the higher proportion of Mainland Chinese tourist arrivals with lower spending power in Hong Kong and Mainland China’s slowing economy and the Chinese government’s move to advocate frugality, the group is planning to diversify the product range and mix and branch out into mid-range products under new brands to broaden the customer base and thus revenue source. In addition, it will continue to expand business in its target markets through both the existing and newly opened stores.”
Moiselle plans to develop a menswear offer under its own brand and to co-operate with France’s Sequoia accessories to design, manufacture, wholesale and retail apparel products under that brand.
“This is the first time for Sequoia to launch products other than fashion accessories, and such an initiative will allow the group to demonstrate its versatility in executing its diverse-product, multi-brand strategy,” the company said.
Moiselle will also strengthen its operations in Mainland China, its key focus of business development, by restructuring and strengthening its sales network there with the aim of increasing the market penetration of both its house brands and the introduced European brands in the country’s major cities and raising operational efficiency.
A newly-opened 6000 sqft M Concept store at Sands Cotai Central in Macau serves as a platform to showcase the “unique and delightful collections and services” of the brand, it said.
In yet another initiative this year, Moiselle says it plans to open an eCommerce site to capitalise on the surging momentum of Mainland Chinese towards shopping online.
“The group’s online shopping platform will be able to set an example of how the group can adopt an online-to-offline marketing model to reduce overheads and to get inspiration to improve its services that target different customers.”
The company says it will step up its marketing and promotional efforts, especially those gearing towards younger consumers, to raise the market’s awareness of its house brands and the introduced European brands.
In the year to March 31, Moiselle’s annual profit was $11.33 million, a sharp 59.4 per cent decrease on the previous year.
The company recorded a 4.1 per cent decrease in Hong Kong sales to about HK$223.4 million, which represented 53 per cent of its total turnover.
In Mainland China it revamped its store network, closing 23 stores and opening 10. China sales totalled $89.7 million, down 20 per cent. Moiselle says its China sales were hit by decreased spending on luxury goods, caused by the Chinese government’s move to advocate frugality and the country’s decelerating economic growth.
In Macau, the company’s five retail stores generated a combined revenue of about $53.6 million, down 6.5 per cent.
“As more five-star hotels, large shopping centers and casinos are opened in Macau, the management is confident of consistent growth in the market for high-end clothing and accessories,” the company statement said.
Its 21 retail stores in Taiwan generated combined sales of $43.4 million, accounting for 10 per cent of the group’s revenue.
And in Singapore, Moiselle made “encouraging progress”, its four stores, achieving 46 per cent sales growth to $9.9 million for the year.
Combined turnover for all operations decreased by 8.4 per cent to $420 million. Gross profit margin was 83.2 per cent, as compared to 80.6 per cent the previous year.