When Hong Kongers rush across the border to shop at Sam’s Club Shenzhen on weekends, leading Mainland hypermarket chain RT-Mart can only look on with envy. Its parent, Sun Art Retail Group Ltd. (6808.HK), issued a sudden profit warning this month, saying it tumbled into the red during its latest fiscal year through March 2024 to the tune of a 1.6 billion yuan ($220 million) loss for the year, reversing a slight 78 million yuan profit the previous year.
The massive loss mainly stemmed from charges related to store closures, as well as impairments on its fixed assets and goodwill. Excluding those impairment losses, the net loss totaled between 600 million yuan and 700 million yuan, mainly due to business restructuring costs and a decrease in the average value per transaction caused by less stocking up on goods by its customers at their homes.
Parade of store closures