RAPAPORT... Chow Sang Sang’s revenue slid 15% year on year in 2020 amid coronavirus-related restrictions that took a toll on consumer sentiment.
Group sales for 2020 fell to HKD 15.03 billion ($1.93 billion) as border closures in Hong Kong prevented tourist arrivals, a large source of the company’s revenue in the municipality, the jeweler said last week. Wedding cancellations resulting from government-imposed limitations on crowds also impacted sales during the year.
Proceeds from jewelry retail dropped 19% to HKD 13.10 billion ($1.68 billion), while revenue from other businesses — including property — rose 31% to HKD 1.93 billion ($248.9 million). Profit plunged 15% to HKD 544.5 million ($70 million).
Revenue from mainland China decreased 10% to HKD 8.69 billion ($1.12 billion). Sales fell 29% in the first half of the year but rebounded 10% in the second half as the Covid-19 situation eased and stores reopened after lockdown. Sales in Hong Kong and Macau plummeted 34% to HKD 4.26 billion ($548.2 million) due to the absence of visitors to the area and the lack of wedding celebrations. Government aid and rental relief partially offset a loss caused by an impairment charge of HKD 170 million ($21.9 million) as a result of prolonged losses in a number of stores. the company said.
Chow Sang Sang intends to continue to optimize its digital offering as consumers increasingly turn to online shopping, it explained. The company will also focus primarily on its operations in mainland China while the economy continues to reopen.
“Stepping into 2021, overseas visitors to Hong Kong remained at zero, and crowd-control measures continued to halt most wedding plans,” the retailer said. “China’s pace to rebuilding its economy under Covid-19 and the ongoing China-US friction is of paramount importance to the world’s economic recovery and our business outlook.”
“With global vaccinations underway, we have seen encouraging surges in consumer spending in our major markets during the Chinese New Year period,” the company added.
Image: A Chow Sang Sang store in Beijing, China. (Cathy Tam)
Source: Rapaport 29-03-2021