Sogo Department Store will achieve sales growth by big sales
Sogo store operator Lifestyle International (1212.HK) says it will launch more promotions this year as it targets single- digit growth in same-store sales after it reported net profit slid 12.4 percent to HK$2.14 billion last year. Thomas Lau Luen-hung, the chief executive of Lifestyle International Holdings Ltd., suggest that if any department fails to achieve growth, the group will change another strategies immediately.
Thomas Lau also said the decrease in profit of Lifestyle International was mainly due to the Sogo’s branch in Tsim Sha Tsui ceased operations for renovation for nine months during the year and the newly opened Sogo department store, Shenyang in China losing more than HK$100 million.
Despite the profit loss due to Sogo Tsim Sha Tsui store, the Sogo Causeway Bay store performed better than that, recorded 3.4 percent year-on-year growth. A final dividend of 34.3 HK cents per share was declared.
Lau was cautious about this year’s retail market as the China economy slows. But he is confident the group can continue to outperform the market. He think that the environment remains difficult so they will change brand portfolios; for example, introducing more affordable luxuries.
Lau did not hear about government’s plan of reducing visitors allowed under the individual visit scheme for Chinese visitor, but there have been fewer Chinese big spenders. He pointed Lifestyle will not totally depend on the individual visit scheme. The group has 40 percent of sales from overseas visitors, of which 80 percent are from the mainland China.