Hong Kong based cosmetics retailer Sa Sa International announced on Monday (2nd December) that it will be closing all 22 of its Singapore outlets as soon as it is able to end the stores’ leases. Approximately 170 employees will lose their jobs as a result.
The company said that the affected employees will be “fully compensated in accordance with local employment laws and regulations”.
Sa Sa, which opened its first Singapore store in 1997, has a relatively small business here. It comprises 8 percent of the company’s 270-odd stores and 3 percent of its 4,700 employees across Asia. But it has made losses for the last six years in a row, with earnings driven into the red by lowering consumer sentiment and also by high rental rates (a common problem faced by retailers in the Singapore market.)
Now, between the Sino-US trade war and the destabilization of the company’s core market in Hong Kong following the intensification of anti-government protests, the company can no longer afford to prop up this small and ailing market. Sa Sa’s earnings took a massive plunge in 2019, going from a HK$202.9 (US$25.9) million profit in September 2018 to a HK$34.9 (US$4.46) million loss at the same time this year.
“After careful consideration, the Group believes that the closure of its business in Singapore will help improve the performance and profitability of its remaining businesses, and is in the best interests of the Group and the shareholders as a whole,” the company said.
The company will instead concentrate its resources on restoring profitability to its core Hong Kong market, and developing the mainland China and Malaysia markets.
Sa Sa is just one of many companies whose workers have been hit by the turmoil in Hong Kong. Earlier this year, Hong Kong based duty-free operator DFS Group laid off several hundred workers in its Singapore and Hawaii businesses, citing pressure from the trade war and civil unrest. The Hong Kong stockbroking industry is also expected to lay off almost 10 percent of its total manpower by the end of this year, due to the unrest having spurred capital outflows and a dramatic decrease in financial transactions.