High growth with a new eCommerce platform marked Tse Sui Luen Jewellery’s financial year, which saw consolidated turnover drop by 8.6 per cent and profit dive by 40.6 per cent to HK$23.6 million (US$3.038 million).
However, the group reports “rapid growth” in the number of its shops, with expansion of its sales network in Mainland China relying on franchising.
Its turnover decline to HK$3539 million during the year ended February 29 was mainly attributable to a “significant” year-on-year drop in retail sales activity in Hong Kong because of weak tourism numbers.
“However, the encouraging growth of business in mainland China, particularly in the franchise business, remarkably drove the revenue engine,” says its financial report. The group managed to limit the drop in overall consolidated gross margin to 1 per cent, from 46.5 to 45.5 per cent, during the year because of  its corporate policy to monitor gross margins.
Notwithstanding the volatile retail market in Hong Kong, the group says it maintained a healthy financial position during the year. It had been a year fraught with challenges, says chairman/CEO Annie Yau Tse.
“Despite facing tougher market conditions, we are elated by the growth of business in mainland China during the year, namely the eye-catching expansion of the franchised network and the rapidly growing eBusiness.”
The group continued its “store-for-store” strategy in Hong Kong, downsizing shops in prime commercial districts or relocating them to residential areas.
During the year, the retail turnover in Hong Kong and Macau dropped by 21.9 per cent, with same-store sales slipping 24.3 per cent. However, three stores were opened in Hong Kong – in Olympian City, Mongkok, Plaza Hollywood, Diamond Hill, and Temple Mall North, Wong Tai Sin. Two stores were closed, taking the total at year end to 28 self-run outlets in Hong Kong and three in Macau.
In terms of product, buying patterns shifted from luxury jewellery and high-ticket items toward more mass-market commodities. To meet the changing market, the group launched a “Finger Language” campaign to attract younger consumers using digital media.
On the mainland, the group had 187 self-run stores at year end, while the number of franchised outlets rose from 34 to 83. However, as at this week, the total number of self-run stores was 191 with 86 franchised shops, amounting to 277 stores covering 108 cities. The group says it expects to expand its franchise sales network in China at an even faster pace over the next few years.
For its eCommerce platform, there was 584 per cent growth (from mid-2014 to February). Following its launch on T-Mall and JD.com, the group joined the new VIP.com channel in July last year.
Established in 1971, Tse Sui Luen Jewellery (International) was listed in Hong Kong in 1987. It is mainly engaged in jewellery design, trading, retailing, export and manufacturing.