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Sogo owner Lifestyle International reports first loss since 2004 after investment slump dragged down sales, revenue increases last year
- Total sales for 2021 rose 9.9 per cent, while revenue jumped 14.9 per cent
- Contraction caused by ‘significant amount of net investment loss’, company says
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Lifestyle International Holdings, which owns and operates Hong Kong’s Sogo department stores, reported a record loss of HK$1.3 billion (US$166 million) for 2021 on Friday, and said it was likely to face an even tougher year ahead as the city struggled to contain an Omicron-fuelled fifth wave of the coronavirus pandemic.
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The loss was the company’s first ever since it started reporting its financial performance in 2004. Its total sales rose 9.9 per cent to HK$6.2 billion, while revenue jumped 14.9 per cent to HK$2.3 billion. Income from other investments, however, dragged down the retailer’s profit.
“The net loss this year was caused by the significant amount of net investment loss being recorded, which was largely a result of the unrealised fair value loss on the group’s holdings of certain equity and debt securities,” the company said in a statement. “Adjusted net profit attributable to the group’s core retail operations increased 7 per cent to HK$857.1 million from HK$801.2 million in 2020, primarily as a result of sales growth.”
In 2020, Lifestyle International reported a profit of HK$138.5 million despite the absence of mainland Chinese tourists, as Hong Kong closed its borders to stem the spread of Covid-19. The operator of the upscale department stores in Causeway Bay and Tsim Sha Tsui was, however, unlikely to see its fortunes improve vastly this year, with Hong Kong imposing its toughest social distancing curbs yet since the pandemic began in early 2020.
Hong Kong has since January been grappling with the spread of the more infectious Omicron strain, which has led to new stay-at-home orders and dining bans, dampening consumer spending. On Thursday, Hong Kong logged a record 56,827 new Covid-19 cases. On Friday, it recorded another 52,523 cases.
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