Sales slump for Sogo Causeway Bay
Blaming the fall on “slack tourist spending” and weak local consumption, the Hong Kong retailer says its business in both Hong Kong and mainland China remains on a firm footing however, thanks to its strong brand equity and solid fundamentals.
Sogo Causeway Bay’s key indicators stayed resilient amid deteriorating consumer sentiment, says the group. The stay-and-buy ratio rose slightly from 34.6 per cent in 2014 to 34.9 per cent last year, while ticket size was down 3.1 per cent to HK$850 (US$109.35).
During the period under review, the Causeway Bay store had a 2.4 per cent decline in overall foot traffic, with continuing renovations contributing to this. The revamp included a facelift for the main entrance, ground-floor atrium in the new wing and the Sogo Club on the 11th to 16th floors. The group also continued refining the brand and product mix.
As with previous years, the Thankful Week anniversary events in May and November were seen as important shopping festivals, resulting in the store’s sales revenue reaching HK$1.0017 billion for the May week and HK$1.147 billion in November.
After relocating to a prime address in Tsim Sha Tsui in November 2014, Sogo TST quickly established itself as a new shopping landmark, says Lifestyle International. The boutique-style outlet grew steadily with its first full-year sales revenue exceeding that of the old store in 2013.
Its stay-and-buy ratio, average ticket size and traffic footfall all performed well above management projections.
Similar to its Causeway Bay counterpart, the store’s Thankful Week events were strong revenue drivers, generating HK$183.3 million and HK$225.4 million respectively. A report in The South China Morning Post says the group is considering extending the Hong Kong stores’ twice-yearly sales week.
CFO Terry Poon Fuk-chuen says 2015 had not been too bad, “but 2016 will be very challenging”.
As with previous years, the Hong Kong stores continued to significantly boost the group’s earnings, contributing 73.2 per cent of total GSP. The group’s overall turnover for the year rose 3.4 per cent to HK$6.17 billion, while profits fell 10.7 per cent to HK$1.91 billion.