A year ago, Chinese shoe retailer Le Saunda looked to have turned a corner after a string of losses over successive years, but a stock-exchange filing this week has brought beleaguered shareholders back down to earth.
Le Saunda Holdings chairman James Ngai warned in the filing of a loss for the full year of between US$5.46 million to $6.47 million compared with a profit attributable to shareholders of $428,000 last year.
He said third-quarter retail sales in physical stores slumped 35.3 per cent, with same-store sales down 32.3 per cent year on year. E-commerce sales grew by a modest 8.2 per cent.
The company said it ended the quarter with 25 fewer stores than a year ago, with a group count of 360, all but 36 of them company-owned, the balance being franchised stores in Mainland China.
“The expected consolidated loss [is] mainly attributable to a significant decrease of total sales of the group’s physical stores in Mainland China in light of the further dampened economic activities brought by the consecutive lockdowns measures in various PRC regions for the nine months ended November 30, an initial operating loss recorded regarding the newly developed cosmetic business segment; and an exchange loss arising from the significant depreciation of Renminbi.”
Today’s news follows another warning in September ahead of the company’s interim results, when Ngai predicted a loss of $3 million to $3.4 million for the six months to August 31.