On 21st February 2018, the Hong Kong-headquartered firm has rationalised its business by redistributing its resources to its domestic base, mainland China, Macau, Singapore and Malaysia markets, along with its e-commerce presence.
Sa Sa International Holdings is expected to close all of its stores in Taiwan by 31st March 2018.
Economic influence
Amid the economy and retail markets of mainland China, Hong Kong and Macau, Sa Sa anticipates that they will benefit from transport initiatives including the opening of the Guangzhou-Shenzhen-Hong Kong Express Rail Link’s Hong Kong section and Hong Kong-Zhuhai-Macao Bridge.
National policies focusing on the development of the Guangdong-Hong Kong-Macao Bay Area and the Belt and Road Initiative are also set to influence the growth of Sa Sa in these markets.
As the company strives to embrace the opportunities that will crop up from these developments, “the Group has decided to reorganise its business proactively by closing its loss-making operations in Taiwan”, a recent press release reported.
It will replace its efforts in Taiwan with enhanced operations in mainland China, Hong Kong, Macau, Singapore and Malaysia, along with putting more of a driven focus on its e-commerce presence.
Financial implications
For six consecutive years, the Group's performance in Taiwan has recorded losses and has been persistently weak. In the 10 months ending 31 January 2018, Sa Sa’s turnover of its Taiwanese operations decreased by 11.5% in year-on-year to HK$154.3 mn (€16 mn).
Although Sa Sa “took measures to reorganise the management team of its operations in Taiwan to enhance operational efficiency and reduce costs and with the aim of narrowing its losses”, it revealed that its “results were unsatisfactory”.
The closure of its Taiwanese business will strive to “improve its overall business performance and resource utilisation and serves the best interests of the Group and the shareholders as a whole”, Sa Sa revealed.
The resulting operations in Taiwan will impact approximately 260 employees and these will be “compensated according to local labour regulations”.
What the company says
“The Group’s performance in Taiwan has been persistently weak, and the possibility of improvements is low into the foreseeable future,” Dr Simon Kwok, SBS, JP, Chairman and Chief Executive Officer of Sa Sa.
“Having considered the interests of the Group and the shareholders, we decided to close our business in Taiwan so that we can concentrate our resources on other markets and businesses,” added Kwok.
Sharing the company’s focus following the shut down of its Taiwanese stores, Kwok went on to say: "Sa Sa will rationalise its resources to gear up for opportunities in the remaining markets. The move underlines our determination to strive for better returns to the shareholders.”