Sogo Sales Decline In SOGO Department

In February 29th, Hongkong international Sogo Group Co., Ltd., SOGO / kogun department store Limited, announced a 3.4% increase in revenue in February 29th. Net profit fell by 10% over the same period, due to the sharp drop in investment income and the cost of the closure of Jiu Guang Department store.

RIFA international achieved sales revenue of HK $13 billion 800 million in the fiscal year ended December 31, 2015, up 1.6% compared to 2014. Hongkong's sales revenue, which accounts for 73% of the total business, increased by 2.3% to HK $10 billion 134 million 100 thousand, which in turn depended on the lower base number of Sogo SOGO SOGO in Tsim Sha Tsui in 2014.

Tongluowan Sogo SOGO SOGO Department recorded a 4.5% decline in sales revenue due to the decline in mainland tourists and local consumption. The volume of the store decreased by 2.4% year-on-year, and the customer unit price also fell by 3.1% to HK $850, while the same store sales fell 1.7% from the first half to the 4.7% year-on-year decline.

Liu Luanhong, chairman of Li Fu International, revealed that the performance of Tongluowan Sogo SOGO Department was disappointing so far this year, and sales in the same store in 1 and February expanded to double digits.

He hopes to hit the bottom in the two quarter or the second half, but does not expect a "V rebound". It is estimated that it will only develop horizontally. In the long run, he said he still has confidence in Hongkong.

He also said that the sales pressure of luxury goods increased. In the future, young brands and sports brands would be introduced to meet the changing consumer demand in the future.

In the financial report, the group pointed out that the promotional week of "thanks week" anniversary held in May and November two times a year has become an important shopping festival in Hongkong.

In the face of the difficult market and the weakening of consumption power, Liu Luanhong revealed that in the first half of this year, the "thanks week" will be extended to match business incentives.

And make up for the sales performance at the beginning of this year.

In 2015, the mainland business was mixed. The overall sales revenue was HK $3 billion 702 million 300 thousand.

Due to the weakness of the northeast region, the group suddenly closed down Shenyang's Jiu Guang Department Store in December last year and lost one hundred million annually, while the sales revenue of Dalian's Jiu Guang also showed a negative growth of 23.8%.

Shanghai Jiu Guang has a 3.1% increase, sales revenue of 1 billion 998 million 700 thousand yuan, Suzhou light 0.3% to 793 million 300 thousand yuan, the profit margin is steady, the daily average passenger volume increased 4.4% to 22 thousand and 400 passengers.

In 2015, rifle international revenue increased from HK $5 billion 969 million 700 thousand in 2014 to HK $6 billion 171 million 400 thousand.

The gross profit margin was 60.1%, roughly equal to the previous year.

Net profit plunged 10.7% to HK $1 billion 914 million 400 thousand, and net profit margin dropped from 35.9% to 31%.

The group will issue a final dividend of 34.3 Hong Kong cents per share.

Although the Hong Kong dollar exchange rate has strengthened,

He said he did not plan to buy overseas projects.

By the end of 2015, the group employed 2377 full-time employees, 825 of whom were working in Hongkong, and the other mainland employees. The annual staff costs (excluding directors' remuneration) increased by 3.6% to HK $439 million 500 thousand.

Liu Luanhong said the group was negotiating compensation with individual businesses in Shenyang's closed shop, and has already made a provision of 22 million yuan for this purpose, which is expected to be resolved in the first half year. He explained that the closure of the shop was due to the unique economic environment of the northeast region, the short term difficulty in revival and less development plan, but the superiority of the property lot would therefore be retained for future development purposes.

In addition, the group is currently developing second retail and commercial complex projects in Shanghai, Daning, Shanghai, and is expected to be completed in 2018. Liu Luanhong expects the project to boost revenue and earnings growth.

He also said that he would not consider developing e-commerce in the mainland for the time being, because no viable mode has yet been found.