Le Saunda loses anniversary shine

In its 40th anniversary year, footwear group Le Saunda Holdings has little to celebrate with falls in sales and profits for its first half.

In releasing its unaudited results for the six months to the end of August, the company says it has been hit by continuing sluggish markets in China and Hong Kong.

Total revenue dropped by 17.4 per cent year on year to RMB537.7 million (US$81 million), while its overall gross profit margin fell 1.2 points to 66.1 per cent. Consolidated profit attributable to the owners of the company plunged 22.1 per cent to RMB32.4 million.

In Mainland China, the total retail revenue of the group decreased by 17.3 per cent to RMB508.4 million, attributed mainly to an ongoing weakness in the overall retail market, negative growth in same-store sales and an acceleration in closing underperforming stores. Another factor was consumer demand being restrained by the ongoing booming property market.

As shop rentals remain high in Hong Kong and Macau, the operating loss grew there with sales falling 19.2 per cent to RMB29.4 million. The group has adopted cost-cutting measures, including closing unprofitable stores and leasing cheaper office premises.

Meanwhile, the group says it has been vigorously tapping into online retail business, expanding its online exclusive products as well as supply of men’s footwear and handbags. During the six months, the group’s e-commerce revenue dropped by about 30.6 per cent because of it becoming continuously more expensive to acquire online customers.

A series of promotional and brand-marketing campaigns were held during the first half to celebrate the company’s 40th anniversary, and an online leisure brand, Pitta Donna, was launched.

Le Saunda says Mainland China is still its key retail market. At the end of August it had 726 stores in China, Hong Kong and Macau – 110 fewer than at the same time last year. Self-owned stores dropped by 96 while there were 14 fewer franchised stores.

There were 518 Le Saunda stores and 40 Le Saunda Men stores, down respectively by 86 and 17 stores. The number of high-end Linea Rosa stores was steady at 72, while CNE stores decreased by nine to 13.

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