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July 17, 2009

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Sa Sa to step up expansion on mainland

HONG Kong cosmetics retailer Sa Sa International Holdings has decided to accelerate its expansion pace on the Chinese mainland after a slow start and plans to double its outlets to 24 in the next nine months.

Sa Sa International, which has 12 stores in Shanghai, Beijing and Wuhan, Hubei Province, plans to open another 12 outlets in the three cities.

Sa Sa International entered the mainland market in 2005 when it opened its first store in Shanghai but only established itself in Beijing and Shanghai after four years.

Meanwhile, LVMH group's cosmetic retail chain brand Sephora has set up around 60 stores in 20 cities in the mainland in the same period.

But after achieving satisfactory sales and eying the enormous potential, the Hong Kong retailer recently decided to expand on the mainland.

''We have narrowed our losses in the mainland while the number of stores has increased, reflecting business performance has picked up strongly,'' the company said. ''It is in line with our expectations and we will push forward the expansion plans.''

Simon Kwok, chairman and chief executive of Sa Sa International, said the firm planned to invest as much as HK$75 million (US$9.7 million) on new stores in the financial year ending on March 31, 2010. It aimed to boost sales from markets outside Hong Kong to 50 percent from 20 percent in three to five years.

The firm's total turnover rose 6.6 percent in the quarter ended on June 30 while markets outside Hong Kong grew 25.5 percent in the same period.


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