Le Saunda net rises on revaluation gains
Le Saunda Holdings, a mainland and Hong Kong footwear retailer, posted a 17 per cent surge in full-year earnings, as property revaluation gains more than offset declining margins.
Net profit was HK$105.7 million for the year to February, up from HK$90.1 million a year ago. Sales rose 11.8 per cent to HK$739.7 million during the period.
Property revaluation gains jumped 125 per cent to HK$28.2 million and net foreign exchange gains grew more than 10-fold to HK$10.03 million.
These offset a 2 percentage point drop in gross margin due to a more aggressive discounting strategy on which the firm did not elaborate.
Le Saunda is facing increased competition from rivals including acquisition-minded Belle International and Walker Group, which both listed in Hong Kong this year to fund their mainland network expansion.
Belle, the licensee of Joy & Peace and Bata, has more than 2,800 women's footwear stores and 1,050 sport shoe stores under the brands Belle, Teenmix, Tata and Staccato. It aims to open 1,000 new outlets every year.
Walker, which has 392 outlets, plans to open 190 new self-managed shops in the next two years, 90 per cent of them in the mainland.
Le Saunda has 170 self-operated stores and 110 franchised outlets in the mainland.
Company president Eddie Wan Tat-wah said Le Saunda planned to operate more stores on its own and reduce franchising in the mainland to raise its revenue there to 90 per cent from 65 per cent. He gave no timetable for achieving the target.
Hong Kong, where the company has 27 stores, accounts for 35 per cent of its sales.
Mr Wan said the company would open stores in newly completed mainland shopping centres.
In Hong Kong, Le Saunda faces competition from Joy & Peace and Venilla Suite, a woman's shoe brand.