Taiwan has delivered record sales for Hong Kong-listed luxury retailer Dickson Concepts as the company continued to weather Covid-19 trading disruption across Greater China.
During the six months to September 30, group turnover rose 1 per cent to HK$1.008 billion (US$129.1 million). Net profit attributable to shareholders was HK$155.3 million ($19.9 million) up 14.8 per cent year on year.
In Taiwan, ongoing improvements in margins and “aggressive cost and inventory control” drove a 26.6 per cent growth in sales and a record profit, up 194.8 per cent as the company overcame the impact of the Omicron variant of Covid-19 since April.
“The Taiwan market was our strongest market during the period,” the company said in a statement. “The group remains to be cautiously optimistic about the business in Taiwan for the remainder of the year.”
The Taiwan performance helped mitigate an “extremely difficult” trading environment in Hong Kong for the parent of upscale department store Harvey Nichols due to the fifth wave of Covid-19 since January, coupled with very cautious consumer sentiment and a complete lack of tourist spending in Hong Kong. Those factors led to a 10.9 per cent decrease in sales despite aggressive promotional activities.
In Mainland China, retail and wholesale sales grew by 2.7 per cent in local currency terms during the half year, despite the “significant impact” of Covid-related restrictions. All of the company’s key stores were closed at various times and there were “significant disruptions to logistics and supply chain” which impacted the group’s online business.
Looking forward, Dickson Concepts expects the retail climate in Hong Kong to be very difficult, citing the downturn in the stock and property markets combined with inflation and increasing interest rates which it expects will have “a significant and negative impact on consumer spending”. Ongoing uncertainty over the timing of the opening of the borders with Mainland China adds to the company’s pessimism.
However, across the border, the group says it is seeing gradual signs of recovery in both physical and digital channels.
All that aside, the company says its strong net cash position of HK$2.027 billion ($260 million) and healthy balance sheet, leave it “in a strong position to cope with the risk of an imminent worldwide recession and the very difficult retail climate”.
Last year, Covid significantly impacted Dickson Concepts’ full-year profit.
