Mannings Hong Kong resilient in retail drought
Mannings Hong Kong, the jewel in the crown of Dairy Farm Group’s health and beauty division, boosted sales and profits despite the challenging retail climate of 2015.
In its annual results, Dairy Farm said its pan-Asian health and beauty business achieved US$2.6 billion in total sales, an increase of $100,000, or 4 per cent. However tighter margins resulting from promotional activity saw a decline of 15 per cent in profit to $185 million ($219 million in 2014).
The division’s overall result was held back by poor figures from Malaysia and Indonesia.
But Mannings Hong Kong sales and profit achieved solid growth despite having four fewer stores than the previous year.
“Like-for-like sales growth was pleasing, market share increased, and the Mann Card member base grew by 18 per cent year-on-year to reach 2 million,” said CEO Graham Allan in the company’s annual results filing.
In Macau, the company says it achieved “good sales and profits” despite lower tourist arrivals from Mainland China.
“Mannings put particular focus on promotions targeting local customers and introduced new ranges of Health Food supplements.”
In Mainland China, a challenging economic environment and increased competition put pressure on sales with higher losses. The beauty and baby categories achieved positive results, but other categories experienced a decline in like-for-like sales. The company opened a net 25 new stores in the mainland last year.
In Singapore, Guardian achieved solid like-for-like sales growth with all major categories performing well. Market share also grew, and the full-year profits were ahead of the prior year.
In Malaysia, Guardian experienced reduced sales and profits in a soft economy affected by a weakening currency, rising costs and declining business and consumer confidence.
“The group has invested in marketing campaigns and is focusing on improving its range in core categories, as well as improving retail operating disciplines in the stores,” said Allan.
In Indonesia, Guardian delivered a third consecutive year of double-digit like-for-like sales growth despite a tough economic environment for consumers.
And in the Philippines, integration of recently-acquired local chain Rose Pharmacy into the group continues.
“Significant investment has been made, and group executives have been placed in key management roles in the business. Two refurbished stores with a wider health and beauty focus have yielded encouraging results,” said Allan.
In Vietnam, “very strong like-for-like sales growth was evident” with gains in both customer count and average basket size. Guardian opened 15 new stores and closed two, ending 2015 with 38 outlets in the country.
Three new Mannings stores were opened in Cambodia, Dairy Farm Group’s newest market in Asia.
Allan said the health and beauty division is continuing to build its corporate brand portfolio and to improve corporate brand penetration in all businesses.
“It will continue to drive consistent approaches to brand positioning, space range and display, merchandising practices and supply chain. Existing eCommerce offers in Singapore will be extended, and investment is being made to support enhanced customer relationship management.”
* Photo: Mannings at Plaza Hollywood – Hong Kong.