The Rapid Deterioration Of Luxury Sales Has Led To The Continuous Regression Of The Whole Year's Sales.

Disson founded its British flag

Harvey Nichols Xia Fei Ni Gao Hongkong Central Plaza Plaza store

In 2015, Hongkong's retail market, especially the rapid deterioration of luxury goods sales, led to famous retailer and agent Disheng International Limited (0113.HK). Its annual sales continued to decline and its losses expanded more than doubled.

In the 2016 fiscal year ended March 2016, the net loss created by Disheng jumped from HK $110 million 300 thousand in fiscal year 2015 to HK $288 million 200 thousand, including a HK $126 million 300 thousand operating loss. As the retail environment has been slowing down, the non cash impairment of intangible assets and fixed assets of some retail outlets has been HK $161 million 900 thousand.

The diluted loss per share was HK $0.75, compared with HK $0.285 in the previous year.

The board decided to issue a final dividend of HK $0.11 per share, an increase of 83.3% over the previous year's HK $0.60. The group owner, chairman and chief shareholder Dickson Poon has thus benefited more than HK $20 million.

The group said that a substantial increase in dividend payments was due to strong cash flows, with net cash of HK $1 billion 316 million 200 thousand as at the end of March.

Hongkong has built up 68% of the group's business.

The retailing industry needs not only to face the economic slowdown and the decline in the high number of consumers in mainland China, but also face the high cost base, including rent, promotion and employee pay rise.

In addition, the international brand restructuring strategy has a far-reaching impact on retail sales in Hongkong, and the depreciation of the yen will make it more attractive for tourists to spend in Japan.

To sum up, the income of the group dropped by 16.2% to HK $3 billion 621 million 300 thousand during the year, and Hongkong's local revenue and Taiwan share accounted for 18% of the total revenue respectively decreased by 12.8% and 14.3%. China and Singapore and Malaysia also recorded a huge reduction of 25.4% and 40% respectively.

The group's same store sales fell 13.6% year-on-year.

In terms of merchandise mix, fashion accessories accounted for 51% of revenue, while watches, jewellery, cosmetics and beauty products accounted for 24% and 25% respectively.

The group said it is actively seeking to expand and broaden its profit base in many ways, and investing in the stock market and non-listed company has become another major business of the group.

Disheng founded chairman Dickson Poon

After opening 11 new stores in the year, there were 132 stores in the retail network by the end of this year.

The group has its own brand, the old British luxury goods department, Harvey Nichols Nichols, Nichols brand lighter, S.T Dupont France, Italy watch brand Bertolucci Baiyue and self retailing platform, watches, jewelry retailers, disgrace watches and jewellery and beauty products retailers Beauty Avenue and other assets. It is also Tommy Hilfiger's Hong Kong, Macao and Taiwan agents and Southeast Asian agents.

Disheng has also been acting as the Brooks Brothers Group Inc. in the United States since 2003. However, the agreement between the two sides has expired on December 31, 2015. Brooks Brothers Group Inc. announced last year that it had set up a Chinese joint venture company to promote the expansion of the Greater China region with the The Lane Crawford Lane, the fashion retailing management company of the company, which was founded by Disheng.

In his earnings report, Disheng said he was pessimistic about the foreseeable retail prospects. He believed that the retail market in Hongkong would deteriorate and the mainland and Southeast Asia would remain extremely weak. Therefore, the group would strictly control the cost and expenditure at various operational levels.

Last year, the group's gross profit margin was not affected by the increase in discount promotions of retailers and major brands to achieve the goal of reducing sales at the cost of gross margin. It succeeded in promoting gross margin by 110 basis points to 49.6% by changing commodity mix.

On Tuesday, 0113.HK rose to a maximum of 6.2% in early trading on Tuesday. At 13:54 Beijing time, it was HK $2.49, and the increase narrowed to 3.32%.

The stock has fallen by 21.9% in the past 52 weeks, winning 23.8% of the Hang Seng Index.