Loss-making Bauhaus to close 10 stores, axe 100 staff
Hong Kong fashion group Bauhaus International says it will close up to 10 loss-making stores in Hong Kong.
The closures will lead to the laying off of 100 staff, over and above the 200 jobs it culled between April and September last year.
Bauhaus retails under several of its own labels – Tough, Jeansmith, Salad and 80/20 – across 66 stores in Hong Kong, Macau and Taiwan. The company is also the franchisor for struggling British brand Superdry in Hong Kong.
The company has blamed the closures on the coronavirus outbreak, which comes on the heels of six tough months for retailers during the anti-extradition bill protests.
Closing stores before their leases are up is expected to result in a one-off write-off and/or impairment losses of between HK$16 million and HK$50 million, subject to the final results of negotiations between the group and the relevant landlords.
Bauhaus had announced its exit in China markets just last month, but will continue to retail on Tmall and JD.
Besides its Hong Kong closures, the company is evaluating the closure of as many as half of its retail stores in Taiwan by the end of the 2021 fiscal year. Bauhaus has been recording losses abroad for the last two consecutive years.
The brand’s net loss was at HK$95.2 million for the six months to September last year, nearly double that of the previous year. The cause of its performance were attributed to the then intensifying China-US trade ware, depreciation of the Renminbi and social unrest.
The group will continue to focus on rationalising its operations, reducing structural costs and reinforcing its financial resilience. Meanwhile, 50 Hong Kong retailers with a combined 200 shops are on strike against landlords, demanding for leniency on rent during struggling times.