Entered Dickson Concepts (HKG:0113)

Dickson Concepts is a Hong Kong based luxary retailer, with stores, their own brands and resellers. Well known brands include ST Dupont, which caries a range of expensive lighters, pens etc.



5 thoughts on “Entered Dickson Concepts (HKG:0113)”

  1. Barginhunter,

    I live in Hong Kong. Dickson seems like a good pick. I recognize their Tommy Hilfiger and Bertolucci retail stores. Thanks for the idea, I think I am going to initiate a position myself.

    I think I might be able to return the favor by suggesting you to take a look at Emperor Watch and Jewellery (HKG:887) and Oriental Watch Holdings (HKG:398). Both are renowned Jewellers in Hong Kong trading under NCAV.

    John Lui


    1. Thanks for the tips. Oriental Watch Holdings has been a holding for some time. I looked at Emperor at the same time as I picked Oriental, but passed on it. I think I liked the long history of Oriental Watch better.


  2. Retailing is a difficult business and retailing in Hong Kong is quite dependent on tourism from China. Currently we are in a slum. But our retailers are net nets and have a fortress like balance sheet. Those are big names for the locals except Dickson. (But I recognize the brands they represent in Sogo) So they are not going out of business anytime soon.

    They should be able to at least return to profitability once they have reduced the inventory, end some lease on unprofitable stores and negotiate lower rent with the property owners.

    As a Hong Konger I feel comfortable owning them even after they exceed the NCAV when the general industry condition improves, they are worth much more as operating business.


    1. I’ve understood that the luxury retailers in Hong Kong have a difficult time. It’s easy to assume that they have over-expanded fueled by the large increase in mainland tourists during the last decade. As the tourism now have decreased, and are also spending less, there is a oversupply. Turn over and revenue plummets.

      Net-net retailers can be dangerous, it’s easy they are stuck with large inventory of obsolete items. If debt is high, the retailer is unlikely to get out of the negative spiral. Shrinking sales leads to discounts, store closures, inability to service debt and on and on. I’ve seen it a number of times and I’ve come to call it the retail death spiral.

      Now, the HK retailers in the portfolio have large portion of their assets in cash providing higher safety. Inventory is also less than revenue, indicating limited problem of out of fashion items. Moreover the companies seem to have decent corporate governance. If they can weather the temporary slump, it may play out well.


      1. Thanks for your excellent comment. I think inventory build-up shouldn’t be a problem for the watch retailers, Rolexes should appreciate with time after all (They could pay their employees with Rolexes if they can’t clear the shelve, haha!).

        Besides, they own some stores outright, and like you said, these watch retailers have long history, some of these properties were purchased in the 50s and 60s. These Hong Kong properties command staggering prices and should be carried at a small fraction of their market value in the book (I am not an accounting guy but I assume the properties are carried at cost). So, you probably get these hidden fixed assets thrown in for free.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s