Harvey Nichols’ parent company, Dickson Concepts, defied difficult retail conditions and achieved a profit in the first half of its financial year. The company, which operates retail stores in Asia under various brands, reported a 42.7% decline in turnover to HK$981.1 million due to the disastrous retail climate in Hong Kong. However, gains from its investment portfolio, a doubling of profit in Taiwan, and stringent cost control measures helped offset the sales decline.

Net profit attributable to equity shareholders rose to HK$133.4 million from HK$119 million in the same period last year. The company’s investment portfolio contributed a net profit of HK$62.2 million, a significant increase compared to the HK$11.8 million reported a year ago.

Hong Kong experienced one of its most severe retail downturns ever during the first half, thanks to the ongoing Covid-19 outbreak. The pandemic led to soaring unemployment rates and a substantial drop in GDP. Additionally, the absence of international tourists caused retail sales in Hong Kong to decline for 20 consecutive months. As a result, the group saw a 47.4% decrease in turnover in Hong Kong, accompanied by negative cash flows in its retail operations.

Nevertheless, there were positive developments in other parts of the region. The group achieved a profit increase of over 100% in Taiwan, driven by improved consumer sentiment, margin enhancement, and effective cost and inventory management. In China, Dickson Concepts successfully restructured its organization, expanded its retail and digital presence, and achieved significant growth in like-for-like sales. This turnaround made the company’s China operation profitable.

Looking ahead, Dickson Concepts expressed extreme pessimism regarding the retail climate in Hong Kong. The arrival of the fourth wave of the coronavirus, coupled with the cessation of the Employment Support Scheme in November, is expected to further raise the unemployment rate and dampen local consumer sentiment. Although there is a possibility of borders reopening with China and other Asian countries in the near future, the company does not foresee a significant return of tourists anytime soon.

In conclusion, Dickson Concepts managed to navigate through challenging retail conditions in the first half of its financial year. While its retail operations in Hong Kong faced significant setbacks, the company’s investment portfolio, profitable operations in Taiwan and China, and effective cost control measures contributed to its overall profit. However, the future remains uncertain due to the ongoing impact of the pandemic and the challenging retail environment in Hong Kong.

Useful links:
1. Harvey Nichols Official Website
2. Dickson Concepts Official Website