Hong Kong-listed timepiece retailer Oriental Watch Holdings has reported stronger margins on lower sales as it restructured its inventories and range last financial year.
The company, which has 62 retail stores, (46 on the mainland, 12 in Hong Kong, three in Taiwan and one in Macau) says sales fell 8 per cent to HK$2.892 billion last year, but gross profit increased 19.5 per cent to $607 million. With gross profit margin up to 21 per cent, and the impact of rent reductions on overheads, net profit attributable to shareholders surged 768.8 per cent to $139 million.
In its results statement, Oriental Watch said last year’s revival of Hong Kong’s retail market and the return of mainland shoppers had driven growth for the company.
During the last year the company has restructured its inventory management to ensure stable cashflow and a healthier financial position. Policies included monitoring inventory level of high-ticket products and purchasing stocks only when existing inventory depleted to a pre-agreed level.
As at March 31, the group’s overall inventory level stood at $1.001 billion, down 13 per cent from $1.151 billion in just six months.
“In parallel, the group has also continued to step up its efforts in adjusting and optimising its brand portfolio, in order to stabilise the group’s overall sales performance and keep abreast of market trends.
Oriental Watch will continue to maintain a lower inventory level for a better cash position and a sustainable business development in the future,” the company said.
