DICKSON FEELS ASIAN ILLS AS PROFITS DROP FOR YEAR
HONG KONG — Upscale retailer Dickson Concepts has been hit with the full impact of Asia’s financial crisis, reporting a plunge in net profit to $2.1 million for the year ended March 31, 1998, down from last year’s $173.4 million.
Earnings in the most recent year are after a $26.3 million pretax provision for the closing of loss-making outlets in Asia, restructuring of its China operations and devalued assets. In the prior year, profit includes an extraordinary pretax gain of $116.4 million from spinning off subsidiaries in Europe.
Operating profit fell 46.2 percent to $44.1 million in the most recent year from $82 million a year earlier. Dollar figures are translated from the Hong Kong dollar at current exchange.
Turnover for the year inched ahead 1.8 percent to $682.8 million from $671.1 million.
“The group’s operations in Hong Kong faced difficult trading conditions, as consumer spending slowed and retailers started deep markdowns at an exceptionally early stage,” said chairman Dickson Poon. “As a result, margins were greatly affected.”
As for Dickson-controlled subsidiaries in Europe, Harvey Nichols Group PLC, the U.K. department store and restaurant company, posted a 16.1 percent increase in after-tax profits to $15.9 million in the year ended March 28 as sales gained 12.5 percent to $215 million, as reported. Dollar figures are translated from the English pound at current exchange.
French company S.T. Dupont, however, posted a loss for the year of $16 million, after pretax nonrecurring items of $10.3 million and nonrecurring goodwill amortization of $6 million, on sales of $93.5 million. A year earlier, the maker of pens and lighters had net income of $6.3 million on sales of $95.1 million. Dollar figures are translated from the French franc.
Finding a bright side to the Asian economic crisis, Dickson Concepts, in commenting on its financial results, noted that it has secured considerable rental reductions from landlords on both existing and new leases and has agreed to lease substantial prime retail space at rental levels significantly below those prevailing last year. This will pave the way to future growth, Dickson Concepts said, noting it is confident “that it will emerge from the current crisis as the undisputed market leader in Asia.”