Lifestyle International expands in China, competes with online retailers
Department store operator Lifestyle International is taking a cautious approach to its expansion on the mainland in the face of increased competition from online retailers and destination shopping malls there.
Department store operator Lifestyle International is taking a cautious approach to its expansion on the mainland in the face of increased competition from online retailers and destination shopping malls there.
"We are not looking to open 30 stores per year like a department store franchise," chief executive and managing director Thomas Lau Luen-hung said. "We want to be a self-built operator with a solid, loyal customer base."
The operator of Sogo shops in Hong Kong and Jiuguang department stores on the mainland reported turnover of HK$2.85 billion in the six months of the year, up 7.8 per cent from the same period last year, results released yesterday showed.
Earnings per share jumped 20.9 per cent to 66 HK cents. The interim dividend was raised 21.1 per cent to 26.4 HK cents.
Growth in same-store sales slowed to 7.3 per cent at Sogo Causeway Bay and 6.1 per cent at Sogo Tsim Sha Tsui, owing to a decline in "big spenders" and reduced traffic in April and May in Causeway Bay because of construction in the MTR station linked to the shop, the firm's executives said. Hong Kong operations accounted for 72.7 per cent of the company's sales.
"I'm hoping for a more balanced ratio between Hong Kong stores and mainland stores, as the latter has a greater potential for quality growth," Lau said.
Jiuguang sales rose 2.6 per cent in Shanghai and 8.1 per cent in Dalian. Sales at Suzhou Jiuguang jumped 22.6 per cent.
Lau said he expected a single-digit increase in total sales revenue in the second half.
"The anti-corruption campaign's effects are transitory, as both local government and central government policies are aimed at spurring consumer spending," chief financial officer Terry Poon Fuk-chuen said.
Lifestyle recently opened food outlet Shanghai Freshmart.
