Hong Kong’s society continues to be turbulent, and overall consumer sentiment is weak
For skin care brand L’Occitane (00973) for the six months ended September, Hong Kong same-store sales have plummeted 19% year-on-year, with net sales of 58.298 million yuan (Euro, the same below), It is the only region that recorded a decline of 5.6% year-on-year at a constant exchange rate. Deputy Chairman André Hoffmann said that October-November performed worse than September and is actively discussing rent reductions with landlords.
Same-store sales drop by 19%
Asked about the sales situation in October, Hoffmann said that the impact of the demonstrations has greatly reduced the flow of people, and some stores have to be closed for half a day or all day. Among them, the branches in Tsim Sha Tsui and Causeway Bay have been greatly affected, and sales have shown significant negative growth.
He continued that Hong Kong ’s retail market is still very grim and has taken various measures to deal with the current situation
He also revealed that some owners have temporarily reduced rents, and some shopping malls that have long-term cooperative relationships with the company provide assistance such as promotional activities and cash coupons. It also means that closing a store is not determined by the current social situation. Unless the store continues to fail to make a profit, it will choose to close the store. He has long-term confidence in the Hong Kong market and believes that it has development potential.
Due to strong growth in other regions, offsetting the decline recorded in Hong Kong, coupled with the benefit of the new brand ELEMIS, L’Occitane’s net sales in the UK and the US increased 2.3 times and 33.1% year-on-year in the first half of the fiscal year, driving overall net sales It increased by 22.1% year-on-year to 727 million yuan, and net profit sharply increased by 2.7 times to 24.992 million yuan. No interim dividend was paid.
During the period, net sales in the mainland market also increased by 13%. Hoffmann expects that 5 to 10 stores will be added in the next 4 to 5 years, but said that it will not consider opening stores in third and fourth tier cities.