Lifestyle China chairman fears impact of US-Sino trade war
Lifestyle China Group chairman Thomas Lau Luen Hung fears the impact of the escalating US-China trade war on retail sales in the region.
“The escalating Sino-US trade war will probably hinder China’s economic growth, and the effect could spill over into the country’s retail market,” he said in a commentary of the group’s half-year results just released.
For the six months to June 30 group turnover remained stable at RMB609.5 million (US$88.3 million) compared to the same period last year, amid China’s tightening economic measures and the escalating Sino-US trade tensions which he said weighed on consumer sentiment.
The group’s two department stores, Shanghai Jiuguang and Suzhou Jiuguang, managed to grow the average ticket size with attractive product and brand mixes, however net sales proceeds decreased by 0.8 per cent to RMB1.628 billion. Cosmetics and skin-care products achieved the strongest growth.
Profit attributable to shareholders rose by 2.9 per cent to RMB176.8 million.
Looking forward, Hung said that apart from the trade tensions the group will also have to cope with increasing competition from the opening of new shopping spaces in the cities where the group operates its Jiuguang department stores.
“To enhance its competitiveness, the group plans to implement a retail management system that will enable collection of data about customers’ consumption pattern and preferences so that it will be able to making changes to its product assortment and carrying out more precise and targeted marketing and promotional activities, with an aim to enhancing customer loyalty, especially to deepen the engagement with existing VIP customers,” he said.
Restaurant business closed
Lifestyle China has wound down its restaurant operations, closing its loss-making Wa San Mai restaurants in Shanghai Jiuguang and Suzhou Jiuguang after recording a 9.4 per cent decrease in sales during the half year and selling the Hong Kong one to a subsidiary of Lifestyle International Holding for HK$52 million. Lifestyle International owns and operates the Sogo department stores.
Sales at the Hong Kong restaurant rose by 8.4 per cent.