BIZCHINA / Overseas Investment
Sasa expands on mainland
By Ding Qingfen (China Daily)
Updated: 2006-12-20 14:25
Sasa, the Hong Kong-based cosmetics and beauty product retailer,
announced yesterday it will open two more stores in Shanghai in late
December and will have more than 20 stores on the mainland by 2008 in an
attempt to turn around recent profit losses.
"We plan to have 100 stores by 2011 on the mainland, with a budget worth
HK$100 million (US$12.7 million). The expansion rate here is the fastest
in the Asia-Pacific thanks to its huge potential," said Macy Leung,
Sasa's spokeswoman.
Sasa has 52 stores in Hong Kong and Macao, 12 in Singapore and 13 in
Malaysia.
On the mainland, its profits have been down. During the April-September
period, it saw a drop in operating profits of US$8.7 million (US$1.1
million) on the mainland, and will not break even until the end of 2008,
Leung said.
Comparatively, during the same period, Sasa's sales throughout Asia grew
by 14.6 per cent year-on-year, reaching more than HK$1.3 billion (US$167
million), according to its interim financial report.
"We have been losing money here, which is within our expectations," Leung
said, refusing to give more details. She said Sasa will disclose specific
figures for its mainland business next July.
Unsatisfactory profits have partly come from low returns on investment in
Sasa's first two flagship stores, which were set up last March and
November.
Each is located in the city's most bustling areas - Huaihai Road and West
Nanjing Road, and is 400 square metres.
"The rent is high in Shanghai. We aim to build up and promote Sasa's
branding image rather than do business by having the two stores," Leung
explained.
Sasa's other stores will cover an area of 100 square metres, less than
that of the flagship stores, and will be located in the city's
strategically important areas like shopping malls and high-level
residential districts. Choosing a perfect site has been frustrating,
Leung said.
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(For more biz stories, please visit Industry Updates)
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