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TSL Sees Loss in Tough Year for Hong Kong

Trade war, protests and coronavirus hit jeweler’s business.
Jun 23, 2020 8:03 AM   By Rapaport News
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Tse Sui Luen (TSL) has reported a loss for the full fiscal year, as it faced challenges from the US-China trade dispute, protests and the coronavirus pandemic.

The net loss totaled HKD 89.8 million ($11.6 million) for the 12 months ending March 31, compared with a profit of HKD 54.2 million ($7 million) the previous year, the Hong Kong-based jewelry retailer said Tuesday. Revenue slid 28% to HKD 2.91 billion ($376 million).

The year was one of the most difficult TSL has seen in a long time, the company said. In the beginning of the year, the tariff war negatively affected consumer sentiment. That was followed by protests against a government bill, and the onset of the coronavirus in the fourth quarter, both of which heavily affected tourism.

Sales in mainland China fell 21% to HKD 1.99 billion ($257.1 million) for the year. Revenue in Hong Kong and Macau plunged 45% to HKD 848 million ($109.4 million), as the combination of challenges in Hong Kong resulted in a “significant drop” in tourism and “dwindling confidence of local consumers,” the company said.

TSL expanded its e-commerce offering during the pandemic, which has enabled it to gain a larger foothold with younger consumers, it noted. It also launched a new store on the JD e-commerce platform in August, and will continue to broaden its digital presence.

Due to the issues it faces in Hong Kong, TSL is strongly considering its future retail business development in the city. It is also thinking about the possibility of closing stores there.

Sales from other countries grew 20% to HKD 73.6 million ($9.5 million) during the period.

The company believes the current challenges will persist into the new fiscal year.

“Although we are starting to see signs that the tide of the pandemic may be beginning to turn in regions, caution is still required as uncertainty abounds,” it stressed. “It will still take time for consumer confidence to return, even after the outbreak subsides…. The worldwide economy in the upcoming financial year is expected to stay under the shadow of further trade negotiations between the US and China, exerting more pressure on our business. In addition, no end is in sight for the social unrest in Hong Kong.”

Image: A TSL store in Hong Kong. (Naoniaum 21)
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Tags: Coronavirus, hong kong retail, Rapaport News, Tse Sui Luen, TSL
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