Sogo department store operator Lifestyle International (1212) estimates that the retail market will continue to struggle until the end of the year despite the festive season. It will withdraw from the stock market next month with its privatization proposal approved yesterday.
The dim forecast on retail came as the inflow of tourists has not seen a significant improvement, compared to the boom in outbound trips under the three-day medical surveillance requirement, said the company's executive director, Lau Kam-shim, the daughter of chairman Thomas Lau Luen-hung.
The shopping mall operator also expects a plain retail business next year.
The help of the consumption vouchers issued by the government in October is smaller than the previous rounds as well, said Lau.
Though the traffic remains flat, as with previous promotional sales in place, the average price per order was reduced, said Lau.
The remarks were made on the same day that Lifestyle International announced its privatization plan had been approved by its shareholders.
After the approval, 376.82 million shares, representing 25.09 percent of the company, will be purchased for HK$5 each.
The privatization, proposed by chairman Thomas Lau in August, will cost HK$1.88 billion in total. Thomas Lau, together with his wife and his daughter, holds 76.49 percent of Lifestyle International.
With the last trading day on December 6, the company will be delisted from the exchange in Hong Kong on December 20.
On the vote, about 95 percent of shareholders without an agreed on the proposal at yesterday's court meeting, standing for 152.91 million shares, while 99.36 percent, or 1.28 billion shares, accepted the plan at the general meeting yesterday.
Shares of Lifestyle International rose 4.48 percent to HK$4.9 yesterday.
Meanwhile, the executive director said the privatization will not affect the development of a new Sogo shopping mall at Kai Tak.
One of the two commercial blocks will start the business trial by the end of 2023, and the construction of both buildings can be finished in 2024.
But the management of Lifestyle International predicts the retail business faces challenges in the short term as it takes several years for a new shopping mall to have stable traffic.
Lifestyle International won the plot at Kai Tak for HK$7.39 billion in 2016.
Traffic remains flat at Sogo outlets. SING TAO
