31 Oct Footwear retailer halts expansion in HK over high rents
Footwear manufacturer and retailer Le Saunda Holdings Ltd says it will not open any news stores in Macau or Hong Kong due to the spike in rents.
The company told the Hong Kong Stock Exchange late on Monday it opened three new outlets in the two cities during the six months ended August 31.
“However, the group will not step up the retail network expansion in the short term in view of the persistent high rent in the region,” Le Saunda said in a filing.
In the previous period the company relocated its Venetian Macao shop to a “prime location” street, in a move that increased its rental expenses. The store was moved to Rua da Palha, near the Ruins of St Paul’s.
The retailer has two stores in Macau. In January it agreed to a 60 percent increase in the rent of its other outlet here, located at Rua de São Domingos, in the tourist-heavy Senado area.
Le Saunda is now paying HK$3.46 million (US$446,300) per year for a store with just 103.7 square metres, even though the company is leasing the store from one of its executive directors, Marces Lee Tze Bun.
The retailer will instead focus on mainland China, where revenue increased by 23.1 percent to HK$618 million and “remarkably outperformed that in Hong Kong and Macau”.
Le Saunda’s Macau sales rose by 14.8 percent year-on-year to HK$17.2 million in the six months ended in August.
The company’s overall gross profit increased by 21.3 percent to HK$577.5 million.