Le Saunda expects annual profit slump

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Footwear and accessories retailer Le Saunda Holdings Ltd. announced an expected decrease of between 35 per cent and 40 per cent in consolidated profit for the financial year of 2016/2017, according to a filing with the Hong Kong Stock Exchange.
According to the company, the expected decrease in annual profit was due to the decline in sales in its last financial quarter ended February 28 – a ‘traditional peak period of the retail market’ and ‘a main revenue and profit making season.’
In the same filing, the company announced that its total retail sales had registered a 17.2 per cent year-on-year decrease for the three months ended February 28, while its e-commerce business saw a decline of 41.3 per cent year-on-year during the same period.
‘The significant decrease of retail sales was a result of the substantial increase in off-season product sales ratio compared with the last year, as it was the Group’s objective to clear up off-season inventory in order to minimise the potential inventory pressure as well as to maintain a strong and healthy cash and bank position in this uncertain sluggish retail market,’ the Hong Kong listed company stated in its filing.
The release also said that the total number of outlets the company operated in Mainland China, Hong Kong and Macau had decreased year-on-year by 100 to 796 outlets as at the end of February this year.
Le Saunda is engaged in the design, development, manufacturing and retailing of ladies’ and men’s footwear, handbags and accessories in Mainland China, as well as in both SARs using a vertically integrated business model.