Dickson profit soars despite drop in sales
Turnover at Dickson Concepts (International), the luxury fashion retailer and distributor, fell last year but profits rose sharply because of an exceptional payment relating to licensing rights and lower operating costs.
Turnover for the year to March fell 5.3 per cent to HK$3.63 billion, a decline the company attributed to the termination of the sale of Polo Ralph Lauren products.
The company will pay a final dividend of 18 HK cents per share. A special dividend of 18 HK cents per share will also be paid to mark its 30th anniversary.
Dickson, which had the licence for Polo Ralph Lauren products for more than 20 years, lost the distribution rights in January when Polo said it would manage the wholesale and retail network in Southeast Asia itself.
Net profit rose to HK$304.21 million from HK$51.37 million in the previous year.
Earnings per share rose to 81.7 HK cents from 13.8 HK cents.
Polo Ralph Lauren paid US$18.2 million for the cessation of Dickson's rights to distribute the brand.
Chairman Dickson Poon said the discontinuation of the licence had led to a fall in sales and profit, 'but payments received ensure the group has the financial resources to pursue future investment opportunities'.
The company said it has the distribution rights for American Eagle Outfitters, which will open three stores next year, in Shanghai, Beijing and Hong Kong.
It expects the initial investment in American Eagle to be HK$120 million and that it 'is confident that given the brand's proven popularity and success in North America, [it] will be similarly well received in Asia'.
In addition, Dickson's licence for the Tommy Hilfiger brand in Hong Kong, Macau, Taiwan, Singapore and Malaysia will be extended to March 2019. However, it will terminate the rights on the mainland on February 28 next year.
Tommy Hilfiger will pay Dickson Concepts US$21 million for the expiration, which Poon says will be booked in the last quarter of the 2011 financial year.
The company has also opened new stores for well-known brands such as Brooks Brothers, SD Dupont and won the distribution rights for Roger Vivier and Versus last year.
Fifty-six per cent of sales were generated in Hong Kong, 22 per cent on the mainland, and 16 per cent in Taiwan.
At the end of March, the company had 381 shops - 49 in Hong Kong, 239 on the mainland, 72 in Taiwan, three in Macau and the rest in Singapore and Malaysia.
Shares of Dickson Concepts fell 1.9 per cent yesterday to HK$5.18.
Celebration
The retailer will pay a special dividend to mark its 30th anniversary
The amount of sales, in HK$, Dickson Concepts (International) recorded for the year to March: $3.6b
The amount, in HK$, the firm earned, including payment for losing the rights to Polo Ralph Lauren products: $304m
The number of stores operated by the company in the region at the end of March: 381
