Chow Sang Sang to boost store network as sales soar
Listed jeweller Chow Sang Sang Holdings plans to continue opening new stores at a rate of 50 a year after sales and profits soared in the first-half year.
The group’s turnover increased 19 per cent to HK$9.558 billion (US$1.2 billion) and profit attributable to shareholders increased by 54 per cent to $606 million.
In Hong Kong and Macau, sales grew 24 per cent due to increased visitor numbers from the mainland, and last year’s low base. Same-store sales growth was 22 per cent, compared to low single-digit declines in the first two quarters of last year.
During the six months, Chow Sang Sang opened one new shop in Yuen Long and closed one watch shop in Mong Kok along with an Emphasis shop in Elements, Kowloon.
Macau sales also benefited from rebounding visitor numbers.
The company also benefited from rental reductions on some stores of up to 40 per cent where leases were renewed, although one lease renewed with an 11 per cent increase.
However chairman Vincent Chow Wing Shing warns that with the retail sector seemingly on a rebound, further room to reduce Hong Kong rental expenses “may be limited”.
Mainland China is where Chow Sang Sang is focusing its store network growth. There, turnover rose 23 per cent year on year to $4.966 billion. However in Renminbi terms, total turnover rose by 13 per cent and same-store sales growth by 2 per cent, reflecting the changing exchange rate.
Online sales continued to grow, now accounting for about 14 per cent of the company’s Mainland China sales.
As at the end of June, Chow Sang Sang had 442 shops in 121 cities, 34 of them newly opened during the half year, however 14 were closed.
Chow said the company will continue to open new stores at around 50 per year, and seek ever-tighter integration of the physical shops with its online offer. Many of those new stores are likely to bear the company’s new brand MintyGreen, of which eight are now trading. The new brand aims to appeal to new and younger customers “with an ambience and a product focus that are quite different from those of the mainline stores”.
He said that as the mainland economy continues to expand, increasing sophistication in consumer behaviour “provides room for growth via product, services and brand differentiation”.
Meanwhile, Chow Sang Sang described Taiwan’s retail market as “stable but weak” and recorded no significant change in its trading there compared with last year.