Beauty products retailer Sa Sa International is to exit Taiwan, citing continuing losses.
Sa Sa Taiwan will close all its stores, with the loss of 260 jobs, by the end of next month.
CEO Simon Kwok said the board had decided to concentrate its resources on Mainland China, Hong Kong, Macau, Singapore and Malaysia and on expanding its e-commerce business.
“The economy and retail markets of mainland China, Hong Kong and Macau are poised to benefit from the impending opening of the Hong Kong section of the Guangzhou-Shenzhen- Hong Kong Express Rail Link and Hong Kong-Zhuhai-Macao Bridge, and national policies including the development of the Guangdong-Hong Kong-Macao Bay Area and the Belt and Road Initiative,” said Kwok in a voluntary statement to the Hong Kong stock exchange.
“To more fully capture the opportunities that will arise from such developments, the board has decided to reorganise its business proactively by closing its loss-making operations in Taiwan.”
Sa Sa Taiwan has posted losses for six consecutive years and trading has been “persistently weak,” said Kwok.
For the 10 months ended January 31, turnover in Taiwan decreased by 11.5 per cent in local currency terms year-on-year to HK$154.3 million.
“The group took measures to reorganise the management team of its operations in Taiwan to enhance operational efficiency and reduce costs and with the aim of narrowing its losses, but the results were unsatisfactory. After careful consideration, the board believes that the closure of its business in Taiwan will help improve its overall business performance and resource utilisation and serves the best interests of the group and the shareholders as a whole.”
He said that while the closure of all the Taiwan stores will result in a loss, it will not have a significant adverse effect on the group’s financial performance and operations – the Taiwan market accounted for just 2.5 per cent of the group’s turnover in the six months to September 30.
Sa Sa Taiwan is a wholly-owned subsidiary of Hong Kong-headquartered Sa Sa International.