Bonjour loss grows, as expected
Cosmetics company Bonjour Holdings’ first-half operating loss expanded to HK$50.3 million (US$6.4 million) from $22.3 million for the same period last year.
This follows a warning last month projecting a “substantial” Bonjour loss.
The company’s gross profit margin dropped from 40.3 per cent to 36.6 per cent, and it had a 9.3 per cent drop in turnover to $916.8 million.
Included in the operating loss was a loss on disposal of available-for-sale financial assets amounting to $6.1 million. Excluding this, the operating loss narrowed down from the figure of $55.6 million at the end of last year’s second half to $44.2 million.
Bonjour says its performance reflects the plummeting of Hong Kong retail sales to all-time lows over the past few years. It has been hit by the steep drop in mainland visitors, an “inharmonious” political climate in Hong Kong and cross-border conflicts.
It also says Chinese tourists no longer consider high-value, big-ticket shopping as a top preference, instead focussing more on experiencing Hong Kong’s culture and history.
In response to these trends, the group says it has adjusted its product portfolio, pricing and sales network, and has been involved in exhibitions around the world in order to expand its sourcing network.
Bonjour has also strengthened its e-commerce sales channels. In addition to its official online shopping website and long-established shopping platforms at Tmall and WeChat, the group has cooperated with China-post Cross-border eCommerce to launch an online cross-border shopping platform that has further integrated online and physical stores. First-half online retail sales in the Hong Kong and China markets grew by 2 per cent.
Bonjour also rationalised its retail network. With sharply falling rents offering retailers more affordable choices, it seized opportunities to renew existing leases at “considerable” concessionary rent reductions and to spread the store network to different neighbourhoods.
At the end of June, the group had a combined overall store count in Hong Kong, Macau and Guangzhou of 43, down three from the same time last year. The retail store rent-to-turnover ratio improved to 20.4 per cent from 21.1 per cent.
The group now distributes 180 brands of global cosmetics, skincare and healthcare products, including Auslin, Dr Bauer, Dr Schafter, Suisse Reborn, WowWow and Yumei. Because of changing customer preferences, the group’s own product sales mix underperformed, decreasing by 1.8 per cent year on year.