Property interests return Moiselle International to profit
Luxury apparel retailer Moiselle International has returned to profit – but it was property, not fashion, that took it there.
The company has reported a profit of HK$1.261 million for the latest year, compared with a $52 million loss the previous year. However the profit was driven by increased valuations of the company’s investment properties – its retail trading operations ended the year $21.6 million in the red (compared with a $55 million loss the prior year). Group sales increased by 3.6 per cent to $290.6 million.
Primarily targeting luxury apparel markets, the group owns house brands Moiselle, m.d.m.s., Germain and Rosamund Moiselle and also distributes the Lancaster brand. At the end of March, the company had 59 stores and counters in Hong Kong, first- and second-tier cities of Mainland China, Macau, Taiwan and Singapore, a reduction from 75 year on year.
Chairman Chan Yum Kit said while the number of Mainland Chinese shoppers visiting Hong Kong was rebounding, it “seemed to be of little help in boosting the city’s retail sales of wearing apparel” because a higher proportion had less to spend.
“Another key factor is that the city’s local population has changed its consumption patterns – the younger generation increasingly prefer to shop online. As a result, the conventional brick-and-mortar retail shops had to grapple with the growing competition from e-commerce.”
Chan Yum Kit said difficult trading conditions in Hong Kong was compounded by “exorbitant rents” for retail space. In response, the company had closed stores, negotiated lower rents for street-front spaces, and obtained permission to offer several diffusion lines under one roof at some mall stores.
The retailer also worked on enhancing the shopping experience at its retail stores by incorporating elements such as lifestyle, art and environmental awareness into interior decoration. And it organised shopping visits by mainland customers of its VIP club to its showrooms in Hong Kong and hosting them at private promotional events.
Hong Kong sales grew by 3.5 per cent to $155.6 million, which accounted for 53.6 per cent of the group’s total sales.
On the mainland, the group expanded its online sales and marketing at the same time as culling its store network.
Moiselle International adopted an online-to-offline business model through alliances with marketplaces like Tmall and Vipshop and by leveraging social media through cooperation with key opinion leaders. Mainland China sales increased by 11.4 per cent to $48.56 million and accounted for 16.7 per cent of the group’s turnover.
An 8.5 per cent in visitors to Macau last year helped boost Moiselle’s sales there rise by 8.5 per cent to $48.65 million, accounting for 16.7 per cent of group revenue.
In Taiwan, sales fell by 13.9 per cent to $27.22 million, accounting for 9.4 per cent of group revenue.
And in Singapore, sales rose 5.9 per cent to $10.5 million.