Profits plunge at Dickson Concepts
High-fashion retailer and distributor Dickson Concepts (International) saw a 46 per cent plunge in net profit for the year to March as costs rose and termination of distribution rights dragged down income.
The company announced yesterday that net profit for the year to March fell to HK$189 million from HK$347 million a year earlier.
It said profit actually rose 3 per cent year on year, excluding the one-off gain from the cessation of distribution rights of Tommy Hilfiger in the previous financial year.
The American premium lifestyle brand paid Dickson Concepts HK$163.6 million to take back the brand's distribution rights on the mainland in February 2010.
The Hong Kong-based company still operates the brand in Hong Kong and some other markets.
During the latest reporting period, the company registered a 17 per cent increase in turnover to HK$3.99 billion, thanks to the extra revenue from the 80 new shops it opened during the financial year. This expansion, however, pushed up sales costs by 15 per cent to HK$1.83 billion.
Dickson Concepts, which operates 320 shops for brands like Brooks Brothers, Dickson Watch and Jewellery and Rolex in China, said it was confident its business would grow steadily this year despite the slowing economic growth and the impact of the euro-zone crisis.
In October, the company opened the 83,000 sq ft Harvey Nichols Asian flagship shop in Hong Kong's Pacific Place after withdrawing the Seibu shop from the site.
'The new store was extremely well received by our customers, with sales exceeding our expectations,' the company said.
The Hong Kong market contributed HK$2.16 billion, accounting for 54 per cent of the company's total revenue in the last financial year.
The mainland market generated HK$709 million while sales in Taiwan amounted to HK$659 million yuan for the year.
The fashion company, which holds HK$863 million in cash, said it would exploit 'any investment opportunities of exceptional value' this year.
Shares of Dickson Concepts dropped a little under 1 per cent to close at HK$4.33 yesterday.
The stock has risen 9.6 per cent this year.
It recommended a final dividend of 20 HK cents per share.