City Super seeks buyers amid weaker outlook

The major shareholder of City Super is seeking to sell the retail chain amid adverse retail sentiment in Hong Kong, while Uniqlo owner lowered its outlook this year, but people turning to online shopping have boosted sales of Hong Kong Television Network (1137).

The Fenix Group, a majority shareholder of City Super, is exploring a sale of the high-end supermarket chain that could fetch US$300 million (HK$2.34 billion) to US$400 million, Bloomberg reported, citing sources.

The Hong Kong-based company is working with a financial adviser to gauge interest in its stake from potential buyers.

Peter Woo Kwong-chin, a billionaire and former chairman of Hong Kong landlord Wheelock and Company (0020), owned about 39 percent of the company, according to an exchange filing in 2017.

Japan's Fast Retailing (6288) cut its outlook for the full year ended August 31 this year after a weaker-than-expected quarter, as protests in Hong Kong and a consumer boycott in South Korea hit sales at its Uniqlo stores.

It forecast annual operating profit would fall 5 percent to 245 billion yen (HK$17.43 billion). It previously expected a rise to 275 billion yen for the financial year.

The retailer's operating profit for the quarter ended November 30 last year fell to 91.7 billion yen from 104.7 billion yen a year earlier. Consolidated revenue slid 3.3 percent year-on-year to 623.4 billion yen, with gross profit margin declining 0.2 percentage points to 50.2 percent.

The company said the Greater China region, which includes its Hong Kong business, swung to an operating loss in the September-November quarter.

Bauhaus International (0483) also posted a 24 percent drop in same-store sales for the nine months ended December last year.

Overall same-store sales for the last quarter of 2019 dropped 31 percent from a year ago with that in Hong Kong and Macau falling 26 percent.

The number of its self-managed shops fell to 159 as of December 31, compared with 196 as of March last year.

However, Hong Kong Television Network announced annual gross merchandise value rose 47 percent from a year ago to HK$2.78 billion in 2019.

For the e-commerce platform, the company raised its target of annual GMV in 2020 to HK$3.38 billion, representing year-on-year growth of 21.6 percent, subject to the development of the current social movement and economic condition. It also plans to increase the number of online-to-offline shops to 65 from 60 in 2019.