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Friday, July 29, 2016, 19:00

759 Store shuffles stock to combat losses


CEC International Holdings Ltd, the operator of the Hong Kong grocery chain 759 Store, said on Friday it swung to a net loss of HK$29.7 million for the 12 months ended April 30 – reversing from a net profit of HK$27.7 million a year earlier – due mainly to the struggling local retail business amid a sustained economic slowdown and the strengthening Japanese yen.

During the period, revenue grew 1.5 percent to HK$2.5 billion from HK$2.4 billion, which was far from enough to offset the losses from an unfavorable currency exchange rate and properties investment.

The strong yen caused the company to suffer a net exchange loss of HK$21.5 million, compared with the net exchange gain of HK$15.6 million a year ago. The losses have forced the supermarket chain to reduce the percentage of products it sources from Japan, from 43 percent previously to 39 percent.

The grocery chain, which now operates 271 shops across Hong Kong, sells about 23,000 varieties of products imported from 61 countries and regions. The proportion of groceries including rice, oil, noodles, seasoning and canned foods increased to 25 percent from 13 percent, as the company bets big to increase rice imports from Thailand for the coming year.

Comparatively, the proportion of snacks, which contribute to the lion’s share of the chain’s total revenue, declined to 33 percent from 39 percent.

The company will not pay any dividend in the year ended April 30.

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