Social unrest, trade tensions erode 90 per cent of Tse Sui Luen profits
Weak consumer sentiment based on “social unrest” in Hong Kong and the ongoing Sino-US trade tension have cost Hong Kong-listed jeweller Tse Sui Luen a cut of more than 90 per cent in its half-year profit.
In a profit warning, chairman Annie Lau said a preliminary review of the company’s management accounts for the six months to September 30 show a 14 per cent decrease in turnover.
“The group has recorded the weakest sales in its Hong Kong market in the months of August and September … which is expected to drop by approximately 45 to 55 per cent year on year. Given the challenging and uncertain market conditions on our retail business, the group is expected to record a significant decrease in the profit attributable to the owners of the company for the six months … by more than 90 per cent as compared with that for the corresponding period last year.”
She said the company has introduced cost-saving measures and applied “more proactive operating tactics” to weather the current unfavourable economic and business environment.
“We are negotiating with landlords for rental relief or reduction, in particular for shops situated in the key areas of the social incidents in Hong Kong, and managing our rental and staff expenses as well as general and administration costs at a stable and reasonable level with respect to the business performance. At the same time, we have formulated plans to lower our inventory level to reduce the holding cost, and adjust our product mix and marketing strategies to stimulate sales,” she said.
“We will continue to monitor the relevant economic conditions and the ever-changing retail landscape, including cost pressure and the increasing downward pressure of the domestic economy.”
Lau reassured shareholders that the company’s financial position remains healthy with sufficient cash on hand to meet its business needs.
The half-year results for Tse Sui Luen Jewellery are expected to be released by the end of November.