New Sa Sa stores are set to open in train stations and near the Mainland China border as the beauty retailer adapts to the changing demographic of Hong Kong shoppers.

During a press conference discussing the group’s results last week,  Sa Sa chairman Simon Kwok Siu-ming said in light of the evolving trading environment, the company recognised the need to adjust its store strategy.

Larger stores in traditional tourism destinations would be closed over time, replaced in the network with new stores in the New Territories giving Mainland Chinese daytrippers easier access to its range of products.

At the same time, the company will develop new stores with smaller, compact footprints located in residential shopping centres and train stations, to serve younger, local customers and commuters. These stores will have a footprint of less than 1000 sqft (93 sqm) and stock  the top 20 per cent selling lines of large format stores, with a skew towards increasingly-popular Korean and Taiwanese brands.

Kwok said rents in high-profile tourist locations are so high, closing one store there would save enough to open “five to six stores in the New Territories”.

Sa Sa plans to seek rent reductions of between 40 and 50 per cent when renegotiating terms of leases for 22 stores which are due for renewal this year.

The retailer currently operates 291 stores in Hong Kong, Mainland China, Singapore, Taiwan and Malaysia.

Last week, Sa Sa reported a 12.8 per cent drop in turnover for its latest fiscal year to March, sliding to HK$7.85 billion (US$1011.4 million).