The development of the COVID-19 pandemic, combined with the threat of the most infectious variants, especially the recently known Omicron variant, has continued to inflict serious negative impacts on the retail sectors and show Downside risks to the global economic outlook.
In Hong Kong and Macao, COVID-19 infections at alarming levels prompted stricter social distancing measures, which sharply reduced shopping activities and foot traffic. The fifth and most severe wave of COVID-19 outbreak to date has led to further tightening of various social activities and controls on international travel would likely undermine retail growth prospects in 2022. Recent developments postponed the start date of the planned quarantine. – free travel corridor between Hong Kong and mainland China, which would weaken the short-term retail consumption of cross-border leisure and business travel and thus the recovery of the retail sector in Hong Kong. For the period under review, our operations in Hong Kong and Macao remained significantly loss-making. Despite this difficult operating environment, we still encounter several landlords who are unwilling to provide reasonable rent concessions for our stores.
During the reporting period, in and out of lockdown before many other countries, mainland China’s economy grew when much of the world was still struggling. However, given the volatility of the pandemic and the emergence of infectious variants, the Mainland China market recovery has slowed again.
Mr. Chang Min Huei, Co-General Manager of Bossini, said, “We believe that the difficult environment will continue under the new normal that the pandemic will persist, resulting in a prolonged road to recovery. complete. Despite the unfavorable external factors, the Group started to establish new distribution channels in Mainland China with stores carrying the new “bossini.X” brand and showcasing Bossini’s new image and character. Going forward, the execution of our network expansion strategy in mainland China would be mainly by opening directly managed and franchised stores in shopping malls and appropriate distribution channels in various provinces and cities.Since “bossini.X ” is about to have a new brand positioning, we are targeting completely new distribution channels, and the products will be substantially different from the “bossini” brand. We expect this period of investment to span the next few years with a particular focus on product development and channel expansion, while anticipating the potential downside risks involved. Considering these internal and external factors, we believe that the Group could potentially continue to incur losses during the investment period.”
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