Sa Sa International Announces Annual Results, Loss of 475 Million HKD from Continuing Operations
Beijing News (Reporter Zheng Yijia) On July 17, Sa Sa International Holdings Co., Ltd. (hereinafter referred to as “Sa Sa International”) released its 2019/20 financial year performance report as of March 31, 2020. During the reporting period, Sa Sa International’s continuing business turnover fell 29.9% to HK$5.717 billion, with a loss of HK$475 million, compared with a profit of HK$490 million in the same period last year.
According to the announcement, Sa Sa International’s total turnover (including continuing operations and discontinued operations) for the 2019/20 fiscal year was HK$5,971 million, a year-on-year decrease of 28.83%; gross profit margin dropped from 40.8% in the previous year to 36.9%; total loss was 5.16 Billion Hong Kong dollars, a profit of 470 million Hong Kong dollars in the same period last year.
After the termination of the Singapore business, the total number of retail stores of Sa Sa International’s continuing operations has been reduced from 253 in the previous year to 235. As of March 31, 2020, Sa Sa International operated 44 stores in Mainland China, compared with 54 in the same period last year. In the third quarter, despite the decrease in the number of stores, same-store sales in Mainland China increased by 18.5%, and retail sales also increased by 4.5%. Due to the outbreak of the new crown pneumonia in the fourth quarter, the annual sales performance was affected. According to the announcement, the total turnover of Sa Sa International’s mainland China business fell 12.1% to HK$243 million (the following are all in local currency), while same-store sales increased by 5.2%.
In the 2019/20 financial year, Sa Sa International tried to attract store traffic by introducing more trendy products and expanding its product portfolio in the mainland Chinese market, and increased the proportion of its own brand products in exclusive brands by 3.3 percentage points. However, these measures failed to fully offset the decline in gross profit margins of various product categories, resulting in a decline in gross profit margin from 53.7% to 48.7%. During the financial year, Sa Sa International lost 38 million Hong Kong dollars in the Chinese mainland market.
Sa Sa International said that the current priority is to strictly control costs and capital liquidity, and inventory management has become one of the main methods. At present, Sa Sa International has reduced its inventory from 14.14 Hong Kong dollars last year to 1.006 billion Hong Kong dollars through promotion and other methods. The number of inventory turnover days has also been reduced from 104 days at the end of last year to 101 days as of March 31, 2020.
Beijing News reporter Zheng Yijia
Editor Li Zheng proofreading Li Shihui
Picture announcement screenshot