Beauty-products retailer, Sa Sa International, has posted its Q4 results. Group turnover fell 56.5% to HKD892.4m (US$115.1m).
Multiples factors impacting turnover
The significant decline in Group turnover was partly due to the closure of Sa Sa’s Singapore business. Sales to mainlanders in Hong Kong and Macau fell 80.8%, as consumer sentiment and travel restrictions following Coronavirus (COVID-19) outbreak impacted the business. Temporary store closures and shorter trading hours lowered operating costs, but contributed to a decline in sales. Trading conditions were tough for the retailer even before the outbreak of COVID-19, with social unrest in Hong Kong heavily impacting the business in the second and third quarters.
In Hong Kong and Macau, Q4 turnover fell 62% to HKD657.6m (US$84.8m). The number of local customers increased by 4.1% yoy, however the overall transaction volume decreased by 43.4%. The average sales per transaction of local customers dropped by 19.9%.
The company plans to adjust its product mix to meet local demand for protective and pandemic-related products and other beauty items. Slow-selling lines will be dropped and inventory will be reduced to manage profitability.
Hong Kong store network will consolidate
As at 31 March 2020, Sa Sa International traded 235 stores (112 in Hong Kong and Macau, 44 in mainland China and 79 in Malaysia). In a press release, Sa Sa International, cites, “The Group will continue to downsize its store network in the Hong Kong SAR, and request short term rental concessions from landlords where leases are yet to expire.”
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