Makeup Retailer Sa Sa Removes Self From Taiwan

Hong Kong-based cosmetics retailer Sa Sa International Holdings Ltd. has decided to close its “loss-making operations” in Taiwan and focus on the Chinese mainland, Hong Kong, Macau, Malaysia and Singapore markets, the company announced Wednesday.

The company’s Taiwan stores, which totaled 21 by the end of 2017, will be closed by the end of March, according to a company statement.

“The group’s performance in Taiwan has recorded losses for six consecutive years and has been persistently weak,” the company said. “The group took measures to reorganise the management team of its operations in Taiwan to enhance operational efficiency and reduce costs with the aim of narrowing its losses, but the results were unsatisfactory.”

Around 260 employees will be affected and they will be compensated according to local labor regulations, the company said. Sa Sa said that although the closure will result in a loss, it will not have a significantly adverse effect on the company’s overall financial performance because the Taiwan market only accounted for 2.5% of its total turnover for the six months ending September.

Sa Sa said in its statement that the retail markets of the Chinese mainland, Hong Kong and Macau are poised to benefit from infrastructure developments and policies, including “the impending opening of the Hong Kong section of the Guangzhou-Shenzhen-Hong Kong Express Rail Link and Hong Kong-Zhuhai-Macao Bridge, and national policies including the development of the Guangdong-Hong Kong-Macao Bay Area and the Belt and Road Initiative.”

The company will also concentrate on its e-commerce businesses, it said Wednesday. E-commerce accounted for 4.9% of the company’s total turnover for the six months ending September, more than physical store contributions each from the Chinese mainland, Singapore and Malaysia.

The group launched a flagship store on Alibaba’s online marketplace Tmall in September, marking a “milestone” in its digital strategy, the company said in an earnings report.

Shares of Hong Kong-listed Sa Sa increased 2.15% on Thursday.

Contact reporter Coco Feng (renkefeng@caixin.com)