NewWorld Development Company Limited
EXECUTIVE VICE-CHAIRMAN’S REPORT
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revenue. Proceeds from direct sales
and rental income accounted for
22.2% and 15.9% respectively of the
total revenue. The remaining 1.3%
was derived from management and
consultancy fees.
Regional-wise, Northern China Region
contributed the most to the revenue
of NWDS, amounting to 50.3%
of total revenue, followed by the
South Eastern China Region and the
Central Western China Region, which
accounted for 30.9% and 18.8% of
the total revenue respectively.
As at 30 June 2015, NWDS operated
and managed a total of 43 stores
spreading across 21 cities in Mainland
China with total GFA of over 1.6
million sq m.
merchandise and service portfolio,
in order to be on the right track for
long-term development. NWDS
accelerated its restructuring during
the year under review through
widening its revenue streams to
reduce reliance on commission
income from concessionaire sales.
NWDS also revamped its operational
structure from the former sole-
d e p a r tme n t s t o r e mo d e l t o a
diversified business model comprising
department store, shopping mall
a n d d i r e c t s a l e s b u s i n e s s e s ,
strengthening its expertise in each
business area so as to improve gross
margin and overall competitiveness.
Du r i ng t he yea r unde r r ev i ew,
t he c ommi s s i on i n c ome f r om
concessionaire sales was the major
i ncome con t r i bu t o r t o NWDS ,
accounting for 60.6% of the total
DEPARTMENT STORES
New World Department Store China
Limited (“NWDS”) is the retail arm
of the Group in Mainland China.
During the year under review, China’s
economic growth continued to slow
down. The intensified competition
brought by e-commerce and shopping
malls, coupled with consumers’
diverse needs and rising operating
expenses, deteriorated the operating
environment persistently. In FY2015,
NWDS recorded a profit attributable
to shareholders of HK$69.7 million,
representing a decrease of 86.6%
year-on-year.
In response to the market challenges,
traditional retail companies are under
great pressure for fundamental
transformation, such as precise
market positioning and optimised
