EMPEROR W&J ANNOUNCES 2015 ANNUAL RESULTS
Apr 1, 2016
|Revenue decreased by 25.2% to HK$4,430.8 million (2014: HK$5,924.9 million), primarily due to weak consumption sentiment in Hong Kong resulting from a strong local currency and an unfavourable tourism environment
|Benefitting from the enhanced mix of the jewellery business, gross profit margin remained as 25.0% (2014: 25.1%) despite the watch price cuts in Hong Kong during the first half of 2015
|As a result of stringent inventory management and efficient capital control, the overall inventory level further reduced to HK$3,219.2 million (30 June 2015: HK$3,531.0 million; 31 December 2014: HK$3,838.5 million) and the cash balance increased to HK$809.5 million (30 June 2015: HK$605.8 million; 31 December 2014: HK$443.8 million)
|Seek to operate e-commerce for “Emperor Jewellery” products through online shopping platforms to capture massive potentials of internet and mobile users
|After successful store rental cuts and optimisation of Hong Kong retail network in 2015, it is expected that it will ease the rental pressure in 2016
(Hong Kong, April 1, 2016) Emperor Watch & Jewellery Limited (the “Group” or “Emperor W&J”) (Stock code: 887), a leading retailer of European-made watches and fine jewellery, announces its annual results for the year ended 31 December 2015 (the “Year”).
During the Year, the Group’s performance was adversely affected by various macro headwinds. The luxury consumption sector was hampered by the lackluster macro-economic conditions and continued austerity initiatives in the PRC. Market sentiment in Hong Kong stayed weak due to a strong local currency and an unfavourable tourism environment. As a result, the Group’s revenue was HK$4,430.8 million (2014: HK$5,924.9 million). The watch segment remained a key revenue contributor, and its revenue inevitably decreased to HK$3,541.0 million (2014: HK$4,824.2 million), which accounted for 79.9% (2014: 81.4%) of the total revenue. The revenue from jewellery segment decreased to HK$889.8 million (2014: HK$1,100.7 million). 78.0% (2014: 83.1%) of the total revenue was supported by the Hong Kong market.
Gross profit was HK$1,106.1 million (2014: HK$1,488.9 million). Despite the watch price cuts in Hong Kong during the first half of 2015, the overall gross profit margin was resilient and stayed as 25.0% (2014: 25.1%) by taking the advantages of the enhanced mix of the jewellery business.
The Group recorded a net loss of HK$120.1 million (2014: net profit of HK$138.1 million). Such loss was mainly attributable to an increase in rental expenses, coupled with the weakening sales momentum and decline of gross profit.
The Group monitored the inventory level closely and remixed the product portfolio in line with market responses, to maximise the use of capital and maintain an adequate cash position. As at 31 December 2015, the overall inventory level reduced to HK$3,219.2 million (30 June 2015: HK$3,531.0 million; 31 December 2014: HK$3,838.5 million) and the cash balance increased to HK$809.5 million (30 June 2015: HK$605.8 million; 31 December 2014: HK$443.8 million).
In an effort to relieve rental pressure, the Group streamlined the retail network in Hong Kong during the Year. In Mainland China, the Group reshuffled the jewellery business and extended its “Emperor Jewellery” retail chain in Tier II and III cities, which are experiencing higher economic growth and rapid expansion in jewellery markets. The Group also further expanded its footprint in Singapore by adding two stores. As at 31 December 2015, the Group had 100 stores (31 December 2014: 88) in Hong Kong, Macau, Mainland China and Singapore.
In marketing front, the Group continued to enhance the charisma of its self-designed “Emperor Jewellery” collections to raise brand loyalty. During the Year, the Group has introduced an exclusive line of “Baby” collection to cover a charming range of gold jewellery items, which represents delightful gifts for infant birthdays and other special occasions. As China’s nationwide two-child policy has been in place since January 2016, the “Baby” collection is poised to receive a booming response. The Group also launched holistic promotion campaigns featuring its “Heartbeat Journey” collections with advertisements fronted by renowned artists, Ms. Charlene Choi and Mr. Hins Cheung, respectively.
Ms. Cindy Yeung, Chairperson & Chief Executive Officer of Emperor W&J, said, “2015 was a tough year for Hong Kong retailers, and so as Emperor W&J. We are adopting proactive strategies to mitigate the adverse impact on business operations. After the optimisation of retail network in prime districts, we are planning to extend our coverage to emerging shopping areas in Hong Kong, where foot traffic has been heavier on growing consumer population. We also seek to strengthen our jewellery business by optimising our exposure in Mainland China. In an endeavour to tap massive internet and mobile users, we are keen to explore the opportunities for operating e-commerce and offer our “Emperor Jewellery” products through online shopping platforms. We believe that these initiatives, together with stringent inventory control, will enable us to stay competitive and to withstand in the challenging operating environment.”
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About Emperor Watch & Jewellery Limited
With long establishment history of over 70 years in Hong Kong since 1942, Emperor W&J (887.HK) is a leading retailer principally engages in the sale of European-made internationally renowned watches, and self-designed fine jewellery products under its own brand, “Emperor Jewellery”. Through its comprehensive watch dealership, unique marketing campaigns and extensive retail network at prime locations in Hong Kong, Macau, Mainland China and Singapore, Emperor W&J established a strong brand image amongst its target customers ranging from middle to high income groups worldwide. In recognition of its efforts in investor relations communications, Emperor W&J was awarded with “Best IR Presentation Collaterals – Small Cap” by the Hong Kong Investor Relations Association in 2015. It is currently a constituent of the Morgan Stanley Capital International (MSCI) Hong Kong Small Cap Index and Hang Seng Composite Index in Consumer Goods sector (HSCICG.IND). For more information, please visit its website: www.emperorwatchjewellery.com.
Ms. Winnie Kwong,
Group Investor Relations Assistant Manager
Tel: +852 2835 6791
Ms. Anna Luk,
Group Investor Relations Director
Tel: +852 2835 6783