“Solid retail growth”, a property sale and a tight control on operating costs have been cited in a surging profit attributable to shareholders by Dickson Concepts.
In the year to March 31, the company’s sales rose 10.3 per cent to HK$4.009 billion, with comp-store sales up by 11.2 per cent. Net profit soared nearly three-fold from $151.8 million last year to $403.8 million this year, however the investment portfolio and disposal of a warehouse contributed $235.8 million of that.
Dickson Concepts owns upmarket department store Harvey Nicholls, Dickson Watch & Jewellery and Beauty Avenue. It also has the rights in various territories to brands including Tods, Chopard, Bertolucci, ST Dupont and Roger Vivier.
The company said in a statement that the retail climate in Hong Kong, China and Southeast Asia deteriorated in the second half of the financial year.
In Hong Kong, which accounts for 79.5 per cent of group sales, increasing tourist arrivals benefited the group, especially in the beauty and luxury watch categories, driving an increase in sales in the territory of 15.3 per cent.
“In Taiwan, while the luxury retail market remains weak as a result of the major drop in Mainland Chinese tourists due to poor political relationship between Mainland China and Taiwan, the group succeeded in achieving major improvement in profits through improved margins and tight inventory controls,” the company said.
Given the macroeconomic climate, the group adopted a cautious approach to expansion, opening only 11 new shops during the year, taking its store network to 113: 24 in Hong Kong, 16 in Mainland China, 59 in Taiwan, five in Singapore, six in Malaysia and three in Macau.
Dickson Concepts said the retail climate in Hong Kong, China and Southeast Asia remains challenging in the foreseeable future and the group continues to face a very high operating cost base from rents and staff costs.
“In particular, there are major uncontrollable factors such as a slowdown in Chinese tourist spending, the Sino-US trade war, “severe margins pressure” from online operators globally, volatility in equity markets and a weakened RMB which, with reduced import duties, have narrowed the price gap between Hong Kong and China,” the company said.