Fashion group Bauhaus saw turnover fall 58.1 percent to $47.9 million during the year to 31 March 2021, pushing gross profit down 55 percent to $31 million.
The group was able to deliver a net profit result of $12.8 million – a vast improvement on last year’s $18 million loss – though this was primarily attributable to government subsidies and the cash gained in selling off over half of its retail stores.
“The novel coronavirus outbreak in 2020 has severely hit not only local retail sectors but also depressed many economic activities worldwide,” the business wrote in an update to its investors.
“The same-store-sales growth rate fell to about -40 percent for the year under review. In addition, to confront with ongoing challenges brought on by Covid-19, the group made essential strategic moves to refocus resources on its familiar markets.”
In December, Bauhaus said it would close all stores in all markets outside of Hong Kong and Macau by the end of March 2021 in order to focus on profitability. This has led the brand’s store count of 102 in 2020 to plummet to 49 in 2021.
During FY21, its Hong Kong and Macau segment saw sales fall 45.6 percent, compared to its other regions which fell by 89 percent. Hong Kong and Macau accounted for approximately 92 percent of the group’s total turnover.
Given that the threat of Covid-19 still resonates in many parts of the world, the business expects strong headwinds for the year ahead, and is anticipating a “prolonged path to thorough recovery”.
“The group will maintain a manageable scale of operations at a reasonable profitability level and does not intend to aggressively do fast and quantitative expansion in the near future until seeing strong signs of sustainable economic activity,” the business said.
Instead, Bauhaus will focus on making its now-lean business profitable.