Le Saunda posts another loss, but eyes return to sales growth
After posting a reduced loss for the latest year, shoe retailer looks to return to same-store sales growth.
After closing 126 stores, footwear and accessories retailer Le Saunda has finished its financial year with another loss – but it is less than half that of the preceding year.
The Hong Kong-listed company reported an RMB28 million (US$4.05 million) deficit for the year to February 28, down from RMB59.7 million a year ago.
Sales of RMB908.8 million ($131.7 million) were down 19.6 per cent year on year from RMB1.13 billion. Gross profit was down 23 per cent to RMB457 million.
Le Saunda designs, manufactures and retails products under its own brand name as well as Linea Rosa, Pitti Donna and CNE.
The company blamed the declining sales on the rationalised store network and a new pricing strategy. Most of the store closures were on the mainland, with a net reduction of just one in Hong Kong, leaving 11.
Sales in Hong Kong and Macau fell by 6.5 per cent year on year, but on the mainland by a massive 23 per cent as Le Saunda struggled to embrace the New Retail model and build a multichannel offer.
Le Saunda chairman James Ngai said the company’s objective in the new financial year is to return to same-store sales growth to improve overall performance.
“After this year’s restructuring exercise, the group believes that its physical store network has resumed to a relatively healthy level. The management team will continue to monitor closely the operating performances and timely eliminate low-efficient stores so that we can concentrate our resources in developing new stores with greater growth potential,” he said.
“The group will focus on opening new flagship stores in landmark shopping malls located in first- and second-tier cities in Mainland China. These flagship stores not only can promote our brand image, product quality, and excellent service, but also can stimulate sales growth in strategic regions. Moreover, a high quality and efficient physical store network is vital to the integration of our online 27 and offline omni channel, which is one of the group’s key initiatives.”