Sales and profit at jewelry retailer Tse Sui Luen (TSL) weakened in the past fiscal year, as improved demand in mainland China failed to compensate for sustained sluggishness in Hong Kong.
Revenue fell 3.6% to $438 million in the 12 months that ended February 28, the Hong Kong-based jeweler reported Tuesday. Profit dropped 2.6% to $3 million (HKD 23.2 million).
“A continuing reduction in tourists visiting Hong Kong from mainland China, together with the ongoing instability of both the global and local economic and political environment, conspired to create unfavorable consumer sentiment for the group’s retail outlets during the year,” the company said.
The devaluation of the Chinese yuan, as well as slower economic performance on the mainland — resulting from uncertainty about US trade policy — dented Chinese consumer confidence, the retailer explained. This in turn hampered the Hong Kong tourism industry, it added.
Even so, sales in China jumped 15% to $265.5 million, partially offsetting a 23% slump in revenue from Hong Kong and Macau, which came to $167.1 million. The group had 28 self-operated stores in Hong Kong and three in Macau at the end of February, while its store network on the mainland consisted of 198 self-operated outlets and 132 franchised stores.
Despite the stronger performance in mainland China, the company will take a “prudent” approach there, particularly given the lack of clarity over the US government’s policies, it added. The group plans to keep costs under close control and work to reduce the number of days it takes to replenish inventory.