Triple-whammy sees jeweller Tse Sui Luen post US$11.6m loss
Tse Sui Luen Jewellery has reported a US$11.6 million loss attributable to shareholders for the year to March.
Sales declined by 28.3 per cent to $376 million. The previous year the company turned a profit of $7 million.
The company cited the trade dispute between the US and China, which weakened consumer sentiment in the company’s main markets, followed by social unrest on the streets of Hong Kong from June and then the “devastating” impact of the arrival of Covid-19 from the end of last year, for the disappointing result.
Tse Sui Luen responded by negotiating rent relief with landlords, minimising staff costs and administrative expenses, and streamlining its store network.
Chairman Annie Yau said that in addition to those steps, the group adjusted its product portfolio and marketing strategies to stimulate sales and lowering its inventory level to reduce holding costs. The company’s payroll reduced from 3300 to 2870 during the year to March.
During the year, the turnover of the Hong Kong and Macau retail businesses decreased by 44.6 per cent and same-store sales fell by 41.6 per cent.
The group opened four new stores in Hong Kong – at Tsim Sha Tsui, Tung Chung, Nam Cheong and North Point – stores it had committed at the beginning of the year, prior to the social unrest and coronavirus pandemic.
“In the face of the exceptionally high rentals in Hong Kong, following negotiations, many landlords have offered us rental cuts to help us tide over the current tough operating period, though far from comparable to our decrease in sales. We will keep on negotiating with landlords for further rental concessions as and when required,” said Yau.
Self-run stores on the mainland recorded a year-on-year decrease of 20.8 per cent in sales and same-store sales fell by 21.3 per cent. The company opened 12 new self-operated stores and 78 new franchised stores, but there was a net gain of just 10 stores for the year as poor-performing outlets were shuttered.
Sales in Malaysia grew by 19.3 per cent thorugh the year, despite the nationwide retail shutdown to halt the spread of Covid-19 from mid March. The company now has six stores there, the newest at Mid Valley South Key Megamall.
Online sales grew 17.2 per cent during the year, boosted by a presence on marketplaces including JD, Tmall, Taobao and HKTV Mall, and growth of its own direct-to-consumer site.
“As the retail landscape transforms, we believe that e-business will become a significant and sustainable source of revenue for the group,” said Yau.