HONG KONG, Feb 21 (Reuters) - Hong Kong skincare and cosmetics retailer Sa Sa International Holdings Ltd said on Wednesday it would close all 21 stores of its money-losing Taiwan operation by March-end, and concentrate resources on Hong Kong, Macau and mainland China.
About 260 affected employees will be compensated in accordance with local labour regulations, Sa Sa said in a filing to Hong Kong’s stock exchange.
Sa Sa said the economy and retail sectors of Hong Kong, Macau and mainland China are poised to benefit from the opening of an express rail line connecting Hong Kong to the Chinese cities of Guangzhou and Shenzhen, and a bridge linking Hong Kong to Macau and the Chinese city of Zhuhai.
“To more fully capture the opportunities that will arise from such developments, the board has decided to reorganise its business proactively by closing its loss-making operations in Taiwan to step up its efforts to enhance its operations in mainland China, Hong Kong, Macau,” said Chairman Simon Kwok.
Kwok also said the company would place increased emphasis on developing its e-commerce business.
The closures will not have a significant impact on overall earnings as Taiwan only accounted for 2.5 percent of turnover in the sixth months through September, Sa Sa said.
Sa Sa operated 290 stores in the region as at December-end, including 119 in Hong Kong and Macau, 56 in mainland China and 21 in Taiwan.
The Taiwan operation recorded losses for six consecutive years, Sa Sa said. (Reporting by Donny Kwok Editing by Christopher Cushing)