Sincere revenue eases 2 per cent
Despite Hong Kong’s retail sales slump, department store chain The Sincere Company weathered the challenge for a 2 per cent drop in revenue for the year to the end of February.
Sincere revenue totalled HK$375 million (US$48.1 million), thanks to major savings in running expenses. In particular, losses were reduced with lower store rentals after negotiations with landlords.
The group’s core department store business delivered revenues of HK$368 million, down 4 per cent year on year. The management team focussed on both attracting new customers and increasing visits and purchase frequency of existing customers.
This was supported by new customer-relationship management applications with segmented digital-marketing capabilities.
With the unfavorable macro-environment, more promotional campaigns and theme fairs were rolled out during the year, including a stamp redemption program to reward customers buying luggage, bedding and household items.
Several counters closed during the year, and to compensate Sincere expanded its own range, including men’s shoes from Japan and high-value branded products including furs and crocodile-skin accessories.
While the department store segment generated a HK$90 million loss, this was a 32 per cent improvement on the previous year.
How individual department stores fared…
Shamshuipo Dragon Centre: Revenue was similar but gross profit margins were down. A show window was opened on the first floor, creating a significantly larger promotional area that attracted increased traffic and created a more accessible shopping experience.
Tsuen Wan Citywalk: Revenues increased marginally while gross profit margins declined. Themed promotions covered bedding, sports and hard goods were well received despite competition with the opening of two branded department stores nearby.
Yau Tong Domain: Revenue went up marginally but gross profit margins were down. The mall was fully let with several new outlet shops, attracting a younger customer base. Korean menswear and more outdoor apparel were added.
Sincere MK: This store continued to be the worst performer. Foot traffic, sales and margins keep falling despite major programs to revamp the business. Several important counters have also left the store.
Management is working to revitalise both the product lines and display products, and have added photo stations in the basement.
Central Li Po Chun: Both sales and margins dropped. The product selection was updated, including a jade counter, crocodile-skin handbags and accessories, and furs.
Sincere CWB: Revenue rose marginally but traffic continued to be a major problem. Several sectors were rezoned and VIP events were hosted at the store to increase exposure.