Sa Sa International looking good
With turnover, sales and profits all up, cosmetics company Sa Sa International Holdings is looking good as it enters it second half.
Its group turnover for the six months to the end of September rose 1.6 per cent to HK$3.6 billion (US$460.9 million), while retail sales in Hong Kong and Macau grew by 2.2 per cent to $2.9 billion and profit increased 14.5 per cent to $109 million.
Same-store sales in Hong Kong and Macau fell by 2.1 per cent, with an 0.8 per cent drop in transactions by local customers and a 1.6 per cent drop in Mainland Chinese customers, while the average sales value for each transaction rose by 4.5 and 3.3 per cent respectively.
With a consolidation of its retail network, the group ended the period with the same number of stores as 12 months earlier, at a total of 283. However, it says its initiative to relocate some outlets in tourist areas had a short-term impact on same-store sales.
To seize the opportunity of weakness in the rental cycle, the group opened stores at premium locations in traditional tourist areas to replace stores previously relocated because of high rents. Meanwhile, the Group continued to invest in residential-area stores.
Overall turnover for China grew by 3.9 per cent in local-currency terms to $138.3 million, while same-store sales in local currency increased 5 per cent.
An upgraded format, launched a few years ago, has been further enhanced, and isolated underperforming stores in remote regional cities have been replaced by clustering new stores in provincial capitals.
Turnover for Singapore eased 2.1 per cent in local-currency term to $98.7 million. Underperforming stores have been closed, with same-store sales growth accelerating by 7 per cent in local currency.
Stores were also upgraded stores with more emphasis on the fast-growing makeup category and on better zoning.
The group says it is now in a position to “cautiously expand” its network in Singapore.
Turnover for Malaysia grew 9.2 per cent in local-currency terms to $169.3 million, with same-store sales growth rising a modest 1.1 per cent. Demand was weakened by lower purchasing power of locals as a result of inflation.
While same-store sales rose 0.8 per cent in local currency, turnover in Taiwan fell by 11.5 per cent to $92.9 million.
Domestic consumer sentiment and tourism remained weak because of economic and political factors, but there was an upturn in spending by Mainland Chinese tourists.
E-commerce turnover for the group fell 6 per cent to $177.1 million. This was attributed to over-aggressive and costly promotions to boost sales in the second half of the previous financial year, an initiative that has been dropped.
Projects were launched during the period to develop management of customer relationships and content, and the number of SKUs was trimmed.
It is the group’s strategy to work with different e-commerce platforms to build awareness of Sa Sa on the mainland. The group launched a flagship store on Tmall Global in September.