Hong Kong clothing retailer Bauhaus International (Holdings) Ltd saw its annual net profit plummet by 59.1 per cent to HK$52.9 million (US$6.6 million) for its past fiscal year, due to the plunge in the company’s earnings from the Hong Kong and Macau markets.
According to its filing with the Hong Kong Stock Exchange last Friday, the retailer’s total turnover posted a year-on-year decrease of 5 per cent to HK$1.5 billion for the fiscal year ended March 31, compared to some HK$1.59 billion one year ago.
“As a result of Mainland China’s uncertain economic prospects, instability of financial markets and the appreciation of the Hong Kong dollar against other Asian currencies (including the Renminbi), the consumer spending momentum obviously deteriorated during the year under review and resulted in highly volatile and discount-driven retail dynamics,” it claimed.
For the financial year, the clothing seller generated some HK$1.03 billion from its sales in Hong Kong and Macau, which represents a year-on-year decrease of 8.8 per cent compared to HK1.13 billion one year ago.
In addition, the company claimed that a negative same-store-sales growth rate of some 9 per cent was recorded in the two cities.
The decreases in sales in the two cities led to a slump in the company’s profit before tax from the segment, down by 46.6 per cent year-on-year to HK$99.6 million.
As at the end of March, Bauhaus was operating 214 self-managed outlets, including 86 stores in Hong Kong and Macau, 94 in Taiwan and 34 in Mainland China, as well as 11 franchised outlets in the country.
The company’s turnover derived from the Mainland China market also registered a decline of 2.8 per cent year-on-year to HK$128.8 million, but turnover from Taiwan jumped by 9.2 per cent year-on-year to HK$342.2 million for the year, according to the filing.
The retailer proposed a final dividend of HK6.0 cents per ordinary share to its shareholders, which is down by 56 per cent year-on-year compared to HK$13.5 per cents for the 2014/15 financial year.