HONG KONG — I.T Limited reported a net loss for the six months ended Aug. 31, hurt by currency fluctuations in all of its major markets.
The edgy multibranded retailer, which operates stores in Hong Kong, China and Japan, recorded a first-half net loss of 31 million Hong Kong dollars, or $4 million, compared to a profit of 49.4 million Hong Kong dollars or $6.37 million, the same time last year.
Total turnover of the group increased by 5.1 percent to 3.39 billion Hong Kong dollars or $427.41 million.
Like for many other retailers, Hong Kong was a sore point — sales in the city decreased by 3.6 percent to 1.57 billion Hong Kong dollars or $202.58 million, although the company pointed out that it has outperformed the broader market, helped by its diverse and adaptable product portfolio.
“The ongoing strength of the U.S. dollar (hence Hong Kong dollar) against major Asian currencies has caused considerable impact on the growth of inbound tourist traffic,” the company said.
Mainland China sales increased by 19.1 percent to 1.34 billion Hong Kong dollars, or $172 million, as the company expands its footprint. On a comparable-store sales basis, it grew 5.9 percent, I.T said. “Retail sales growth was largely boosted by sales promotions” and the company observed a “general contraction in spending momentum.”
Sales from its joint venture business — the operation of a Galeries Lafayette store in Beijing improved but still recorded a loss of 13.9 million Hong Kong dollars, or $1.79 million for the period.
Japan business performed well with sales increasing 27.5 percent year-on-year to 3.49 billion Japanese yen, $29 million, but it was offset by the devaluation of the currency leading to just a 6.9 percent increase in Hong Kong dollar terms.
I.T said it is exploring ways to boost its performance including the incorporation of a food and beverage concept in store, tweaking the store layout and various marketing initiatives. The group plans to be conservative in growing its network in Hong Kong due to the challenging times, but “will still be very open and flexible to new fashion names and concepts.”