Sa Sa to Increase China Cosmetics Network, Seek Nationwide Scale

Sa Sa International Holdings Ltd. (178), a cosmetics retailer in Hong Kong, plans to expand its network in China by 51 percent as it seeks to gain nationwide scale in the world’s fastest-growing major economy.

The number of stores will rise to 71, Guy Look, Sa Sa’s chief financial officer, said at a press conference in Hong Kong today. Sa Sa lost HK$38 million ($4.9 million) in China in the year ended March 31, its third straight loss, according to earnings published today. Growth in areas including Hong Kong and Malaysia boosted total net income 35 percent to HK$689.7 million.

Sa Sa, which doubled sales in China last year, is seeking to deepen relationships with suppliers and mall operators in the 11 provinces where it operates and is “well positioned” to become a national chain, management said in a statement today. China’s retail sales grew 13.8 percent in May, trailing economists’ forecasts, and the government has set a 2012 economic growth target of 7.5 percent.

“Our consumer base has expanded, but the turnover is not large enough,” Chairman Simon Kwok said at the press conference today. “It’s more important to improve our network,” he said, when asked about investment losses in the country.

To contact the reporter on this story: Justina Lee in Hong Kong at jlee1245@bloomberg.net

To contact the editor responsible for this story: Hwee Ann Tan at hatan@bloomberg.net

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