Sales have slumped and a substantial profit fall is on the cards for Hong Kong retail group Le Saunda Holdings.
The company has warned it expects its consolidated profit for the year to fall about 35 per cent because of continually rising running costs in China, more discounting to shed slow-moving inventory, a working loss in the Hong Kong and Macau business segment for the year – there was a profit the previous year – plus further exchange losses following the devaluation of renminbi.
The projection came in a short statement presenting its final-quarter figures and a preliminary review of its financial year to February 29.
The company’s self-owned retail business saw total sales drop 12.9 per cent – 13.8 per cent for same-store sales – compared with the same period the previous year.
Le Saunda’s eCommerce business fared better, with sales declining 1.7 per cent.
During the year the company culled eight outlets, ending the period with 896 in Mainland China, Hong Kong and Macau. This comprised 790 self-owned outlets in China, Hong Kong and Macau, and 106 franchised outlets on the mainland.
Le Saunda manufactures and sells shoes, handbags and fashion accessories and sells them in Hong Kong, Macau and Mainland China under the brands of Le Saunda, Le Saunda Men, Linea Rosa and CNE. The company in also involved in property, trade-mark and management services.