Covid drives retailers and malls into losses

Hong Kong's retailers and shopping malls suffered from losses in the first half when the city was hard hit by the pandemic.

Lifestyle International (1212), the operator of Sogo shopping malls, expects to record an interim loss of HK$450 million for the first six months ended June 30.

In the corresponding period last year, the group made a profit of HK$220 million.

Lifestyle said the loss was mainly due to the drop in retail sales from the government's strict measures during the fifth wave of the Covid-19 pandemic, causing fewer customers to visit the group's stores and weaker consumer sentiment in the first quarter of the year.

A net loss is also expected to be recorded from the group's financial investments.

Meanwhile, Wharf Real Estate Investment (1997) said it expects to record a loss for the first half, from a HK$2.97 billion profit a year ago, due to the unrealized investment property deficit.

The company issued a profit warning, expecting that the unrealized IP revaluation deficit for the past six months may exceed the underlying net profit for the same period and the company may record a loss attributable to equity shareholders.

Despite Wharf Real Estate Investment expecting that the interim results may turn from profit to loss, the company stressed that its overall financial, business and operating conditions remain healthy.

And Sa Sa International (0178) posted a 4.6 percent fall in second-quarter revenue to HK$800.4 million compared to a year before.

In Hong Kong, the group's retail and wholesale sales fell by 10.1 percent year-on-year in the first quarter. Though there was a decrease in the number of physical stores, it can achieve double-digit retail sales growth due to the discounts introduced by the group and the government consumption voucher for attracting purchases.

However, business in Macau recorded a sharp decline in sales in the first quarter as fewer mainland tourists visited the city during the pandemic.

In addition, the number of retail stores in the group was 223 on June 30, a decrease of 11 year-on-year.