Massive slump in Le Saunda sales despite promised improvement
After reporting another full-year loss last month struggling footwear retailer Le Saunda said it was expecting a return to same-store sales growth after the bulk of its restructuring program had been implemented.
Yesterday, however, the company reported a first-quarter slump in sales of 25.2 per cent. Same-store Le Saunda sales fell 6.6 per cent and online sales were down 16.1 per cent.
The company did not release sales figures in currency terms, just percentage changes – and it reminded shareholders that the data was based on unaudited operational data.
Last financial year the company closed 126 stores, but as of May 31 this year, store count was down 178 outlets compared with the same period last year, suggesting the closures are continuing.
Announcing the results last month, chairman James Ngai said the company’s objective in the new financial year was 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.
However this month’s trading update suggests substantial work has yet to be completed before Le Saunda returns to positive sales growth – and profitability. Ngai’s comments were reported on May 22, just nine days before the end of the quarter in which the company’s sales performance was trending in the opposite direction to his upbeat comments.
As at May 31, the group had 486 outlets in Mainland China, Hong Kong and Macau. Of those 428 were self-owned outlets across the markets and 58 were franchised stores on the mainland.