Hong Kong-based retailer of second-hand luxury bags Milan Station Expects to Post ‘Significant’ FY Net Loss

December 20, 2013 Leave a comment

Milan Station Expects to Post ‘Significant’ FY Net Loss

Milan Station Holdings Ltd. (1150), a Hong Kong-based retailer of second-hand luxury bags, said it expects to record a “significant” loss for this year amid a slowing market and weaker consumer sentiment.The company is basing its forecast on unaudited management accounts for the first 10 months of 2013 and plans to publish full-year earnings in March, according to a Hong Kong stock exchange filing yesterday. The retailer didn’t quantify its anticipated results.

“The expected loss is primarily attributable to the continuing slowdown in the retail market for luxury handbags and the weakened consumption sentiment of customers in 2013,” Milan Station said in the filing.

The retailer, which drew the highest initial public offering subscription from individuals in Hong Kong in 2011, had a net loss of HK$13.9 million ($1.8 million) in 2012, compared with net income of HK$48 million in 2011, according to data compiled by Bloomberg. First-half net loss this year was HK$10.3 million.

Hong Kong’s retail spending increased by 6.3 percent in October from a year earlier, according to government data. That compared to a median estimate of 7.3 percent in a Bloomberg News survey of economists. By volume, stripping out price changes, sales increased 5.8 percent against a 6.5 percent forecast.

Secoo.com, a Chinese operator of an online luxury-goods sales platform, has approached Milan Station about a possible takeover to provide a back door listing in Hong Kong, Sina.com reported on Dec. 3, citing unidentified people.

Milan Station said on Nov. 20 that its controlling holder has been approached by a potential acquirer in a deal that may trigger a mandatory buyout offer for all of the company’s shares. The statement didn’t identify the buyer. The retailer’s shares have surged 58 percent since that date.

Milan Station, which made its market debut at HK1.67 in May 2011, was unchanged at 95 Hong Kong cents in trading in the city yesterday. The stock has gained 79 percent this year, compared with a 2.2 percent gain in Hong Kong’s benchmark Hang Seng index.

To contact the reporter on this story: Joshua Fellman in New York at jfellman@bloomberg.net

Filed under Macro Trends

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