Triple-figure profit leap for Lifestyle International
Lifestyle International, which runs the Sogo lifestyle department stores, reports a triple-figure increase in profits for the six months to the end of June.
Its interim results show profit attributable to the owners soared by 196.6 per cent to HK$1.2 billion (US$153 million) for the half-year compared with the same period last year, while the reported profit grew by 192.6 per cent.
Meanwhile, total gross sales proceeds edged up 1 per cent to about $4.67 billion, while its turnover declined 2.5 per cent to $2.22 billion.
Lifestyle says its profit boost was primarily a result of a net investment income of $328 million during the period, a revaluation gain of $351.5 million on the group’s investment properties and a decrease in finance costs of $44.2 million.
Its profit was further pushed up by the one-off gain on the disposal of the group’s 59.56 per cent interest in Lifestyle Properties Development to the tune of $420.8 million.
While the retailing market in Hong Kong was generally recovering slowly from an extended period of decline, the group’s stores outperformed the broader market during the half-year, thanks to loyal clientele and effective business strategies, says Lifestyle.
Benefiting from improved consumer sentiment amid strengthening global demand, sales growth of Sogo Causeway Bay in the second quarter turned positive, almost offsetting the sales decline of the first quarter.
The flagship store had sales revenue of about $3.9 billion for the six months, easing 1.5 per cent from same period last year. This was largely because of the closure of the Freshmart supermarket during March and April for renovation, which also affected overall traffic footfall to the store and sales at other departments.
Sogo Tsim Sha Tsui continued to deliver strong performance, with cosmetics and skincare products being the key growth driver. Sales grew by 17.7 per cent for the half-year.
As part of the group’s ongoing efforts to strengthen its brand equity, in July last year it launched the Sogo Rewards loyalty program, which had more than 281,000 member registrations by the end of June.
“Hong Kong, the group’s home market, has shown signs of recovery with retail sales resuming positive growth since March,” says Lifestyle executive director Kam Shim Lau. “With a strong brand equity and seasoned management team, the group has been well-positioned to capitalise on the improving retail market.”
Meanwhile, she says the near-term outlook for the retail sector still hinges on external uncertainties including the US interest rate upcycle, sustainable economic growth and geopolitical tensions.