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Property deal set to save Le Saunda’s bottom line – updated

Hong Kong-listed shoe retailer Le Saunda says same-store offline sales rose by 13.8 per cent in the February quarter after it rationalised its store network. 

In a positive profit alert issued to the Hong Kong Stock Exchange, chairman James Ngai said group sales rose 5.2 per cent year on year after a net 52 stores closed in Mainland China, Hong Kong and Macau. As at February 28, the company had 389 outlets remaining, 347 of them self-owned across the three markets, and 42 franchised on the mainland. 

The company said a preliminary review of its full-year accounts points to a profit of no less than US$13.8 million, a significant turnaround from a $4.7 million loss in the prior year.  

However, that was mainly attributable to the completion of the effective sale of its former factory in Shunde, Guangdong which it closed last May, and reached agreement with local government to hand back for $30 million. Le Saunda made a strategic decision to discontinue manufacturing and to contract production out to third parties. 

While in-store sales are on the rise after several years of decline, Le Saunda’s e-commerce business continues to underperform, with sales down 8.4 per cent year on year in the fourth quarter.

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