Hong Kong tycoon Dickson Poon has proposed taking his flagship company, Dickson Concepts (International), private amid a grim outlook for the city’s retail sector. Poon, who currently holds a 60.5% stake in the company, made a cash offer of HK$7.20 per share to acquire the remaining 39.5%, amounting to a total of HK$1.1 billion (US$141.6 million). This offer represents a 51% premium over the share price of HK$4.78 recorded on April 23 and exceeds any trading level for the stock over the past decade. The bid was made through the trustee of his family trust, and the offer will not be raised. The total valuation of the company under this proposal stands at HK$2.8 billion. Trading of the company’s stock was halted on April 24 and will resume on Wednesday.
Dickson Concepts, established in 1980, operates the Harvey Nichols multi-brand luxury department stores in Hong Kong and mainland China. The company closed its Landmark Central outlet in 2023 after nearly two decades, citing a retail downturn, though it continues to operate at Pacific Place in Admiralty. The privatisation bid is presented as a strategy to combat declining profitability and allow the company greater flexibility to pursue new business directions that would require substantial investment and could initially generate losses.
The company’s earnings fell 40% in the six months ending September 30 compared to the previous year, while turnover declined by 24.4%. It stated that a return to previous levels of profitability and growth is unrealistic. The global luxury retail landscape has shifted, with major brands increasingly managing their own retail operations and reducing reliance on wholesale partners to maintain tighter control over pricing and margins. This trend has been detrimental to multi-brand retailers like Harvey Nichols.
Additional pressure comes from China’s expanded instant tax refund policy for foreign visitors, making luxury products from brands such as Louis Vuitton, Dior, and Moncler more affordable within mainland China than in Hong Kong. This policy shift has made Hong Kong less attractive to tourists seeking luxury shopping experiences. Retail sales in the city dropped 7.8% year-on-year in the first two months of the year, a steeper decline than the 6.6% contraction seen in the fourth quarter. Key segments such as jewellery, watches, and luxury gifts have been particularly impacted.
The privatisation would enable Dickson Concepts to focus on long-term strategic investments without being constrained by market expectations, dividend pressure, or share price fluctuations, potentially extending into new areas beyond its current operations.
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