Dickson Shiamas deal hit in downturn

PUBLISHED : Tuesday, 04 November, 1997, 12:00am
UPDATED : Friday, 28 October, 2016, 9:17am

The repercussions of the regional financial turmoil have affected upmarket retailer Dickson Concepts International (Holdings) and will undermine retail sales across the industry, chairman Dickson Poon says.

He said Dickson had decided to focus on international investment opportunities and put its regional expansion on hold for the time being, having already scrapped a proposed purchase of the listed regional apparel retailer Shiamas.

'There is no question that the retail environment in the region is seriously affected by recent events and that Dickson is directly affected. However, our brands are of the highest quality and have local consumer support,' Mr Poon said.

'The retail sector is undergoing a sharp correction due to the stock and currency downturn. We believe the sector will stabilise and hit bottom next year.' Salomon Brothers Hong Kong analyst Tamara Robinson said Dickson and Joyce Boutique Holdings would be the most seriously affected of the luxury fashion retailers.

'I don't see a good picture for the retail sector due to negative factors including interest rates staying high in the next couple of months and tourist arrivals unlikely to improve,' she said.

In September, Salomon Brothers downgraded Dickson's profit forecast for the year to March to HK$494 million, about 8 per cent below analysts' consensus of HK$533 million, she said.

Whether she would lower the estimate further would depend on the interim results to be announced next month.

Dickson shares shed 25 cents, or 1.5 per cent, to HK$16.40 yesterday.

Meanwhile, Mr Poon said the listed company had decided not to purchase an 80 per cent stake in Shiamas; instead his family's privately owned company Artland Watch would buy the stake for HK$240 million.

'The board of directors decided not to purchase Shiamas because of the current retail climate,' he said.

Dickson had an option to acquire the stake but was unlikely to exercise the option. 'The Poon family intends to develop Shiamas on a long-term basis,' he said.

Having set up its headquarters in Hong Kong six years ago, Shiamas distributes upmarket apparel and accessories under labels such as Versus, Versace Jeans Couture and D&G in Hong Kong, Taiwan, Singapore and Indonesia.

Mr Poon said Shiamas generated turnover of HK$600 million last year.

Shiamas founder and managing director Roland Macek said about 10 stores would be added in Hong Kong and Taiwan next year.

It has 71 regional outlets.