Bonjour posts net loss for 2016

Cosmetic retailer Bonjour Holdings Ltd fell into the red for the whole year of 2016, as total turnover fell by 12.8 per cent year-on-year, according to the company’s annual results filed with the Hong Kong Stock Exchange last Friday.
The Hong Kong-based retailer registered a net loss of HK$217.63 million (US$27.1 million) for the period, as compared to a net profit of HK$570.8 million for 2015. In addition, total turnover of the group dropped from HK$2.29 billion to HK$1.99 billion.
According to the filing, the company’s revenue from the MSAR posted a decrease of 9.88 per cent year-on-year to HK$197.8 million, down from HK$219.5 million, while that from its home market Hong Kong also declined by 13.1 per cent year-on-year to HK$2.05 billion.
In addition, the retailer noted that same-store sales in the two Special Administrative Regions recorded a decrease of 10.1 per cent year-on-year, due to a drop in Mainland Chinese customers.
‘Despite the average sales value per transaction for Mainland tourists up by 7 per cent, the total number of Mainland customers recorded a double-digit drop in 2016. Just the drop in total number of customers contributed about 9 per cent of the overall retail sales decline in the year,’ it explained in the filing.
‘The loss recorded during the year gave Bonjour and the management insight into how the existing focus on one single line of business in a relatively small area, i.e. Hong Kong and Macau, may need to change in the future,’ it added.
Apart from the decrease in the number of Mainland Chinese visitors, the company noted that the ‘changing of customers’ preferences from higher-priced (of higher-margin) products to lower-priced (of lower-margin) products and changing of the traditional way of shopping from offline to online’ also affected its profitability.
Meanwhile, the company’s revenue derived from the Mainland Chinese market amounted to HK$13.5 million for the year, representing a drop of 2.55 per cent from HK$13.8 million for the year of 2015.
The retailer claimed in the filing that it will ‘continue to uphold cost control tactics to cut down expenses and increase profits,’ adding that recent figures showed a gradual recovery for the industry. ‘We believe that the retail industry may see a revival amidst the challenging economic outlook,’ it wrote.
As at the end of 2016, Bonjour was operating a total of 42 stores in Hong Kong, Macau and Guangzhou, a decrease of five from one year earlier.