Tse Sui Luen Jewellery (International) Ltd of Hong Kong said it is counting on a growing market in mainland China and the continued expansion of its e-commerce business to propel the company to further growth.
The jeweller remained optimistic despite reporting a sluggish first-half performance ending in August 31, 2016.
TSL’s sales turnover decreased by 11.6 percent from HK$1.753 billion (US$226.04 million) to HK$1.55 billion (US$199.87 million) during the period in review, while profit attributable to owners of the company was down by 24.1 percent from HK$15.5 million (around US$2 million) to HK$11.7 million (US$1.5 million).
The decline was mainly due to a significant year-on-year drop in retail sales activity in Hong Kong resulting from a fewer number of tourists from mainland China and weak consumer sentiment, the company said.
The group, however, reported that its overall performance was buoyed by an encouraging growth of its businesses in mainland China, especially from its franchising arm.
Annie Yau Tse, chairman and CEO of the group, commented, “We have been through a challenging first half and the group has tried every means to expand sales and remain profitable. For example, we launched several wedding-related campaigns to reinforce our ‘Wedding Expert’ brand positioning, which was warmly received by customers, especially for our first-of-its-kind Wedding Pop-up Corner at our flagship store. On the other hand, we continued to attain satisfying performance in our business in mainland China, which delivered a 5.0 percent growth due to a rapid network expansion.”
Mainland China accounts for around 60 percent of the group’s total turnover. Among the group’s operations in the country, income from the franchising business served as the key driver, with the segment recording an accelerated growth, thanks to a fast-growing network.
As of August 31, the total number of self-operated stores was 197, while a number of franchised stores rose from 83 to 98. As of today, October 27, the total number of self-operated and franchised stores increased to 202 and 110 respectively, amounting to a total of 312 stores in mainland China covering 110 cities.
Another significant development came from the group’s e-business segment. With two new platforms in place during the first half – Taobao.com and Jumei.com – sales from this segment surged five times compared to sales from the same period last year. On top of the two new channels and three existing ones, namely T-Mall, JD.com and VIP.com, the group said it will continue to explore more platforms.
“We will keep reviewing our store network to reduce costs and better serve our customers. Subject to availability of appropriate locations and a reasonable level of rental expenses, we target to open two new retail stores this year to broaden our store network in Hong Kong,” said Tse. “Shop opening momentum shall be maintained in mainland China in the coming years with an aim to expand our franchising network. We expect our e-business channel to maintain its high growth rate in the second half of the year. Given the challenging market situation, the group remains cautious about the outlook in 2017. We shall continue to adopt a balanced business approach, yet seeking changes along the tides, enhancing our competitive edge and to create higher value and returns to our customers and shareholders.”