New Trend Lifestyle Group reports sliding sales

Shares in New Trend Lifestyle Group lost around a fifth of their value on Monday morning after the Feng Shui products and services group disappointed with its first half results.A depressed retail environment in Singapore, coupled with the slower than intended progress in China, meant sales at the AIM-listed group slumped 17.7% from S$5,617 to S$4,623, pushing losses for the period from S$863,000 to S$543,000.Chairman Robert Goddard said it had been a "very testing" period for the group, which has resulted in a "poor" financial performance over the last six months."Management are working hard to stem the losses and have achieved useful reductions in discretionary costs," he said.However, many of these costs, such as rent, are fixed in the short- to medium-term.In Singapore, retail spending fell by an annualised 5.7% compared with the same period last year, leading to a 24.6% drop in like-for-like sales compared to the comparable period. Sales of services were particularly badly hit, reflecting the reduced number of house moves and lower disposable income.Goddard continued: "Planning is underway in Singapore to raise volume and profitability by evolving the business model so that there will be fewer but larger stores."He predicted that the ratio of rental to gross profit will be much more favourable and operating costs can be better contained.In China, the group is in discussions with potential franchisees and for the purchase of a complementary retail chain of stores. It is also aiming to cooperate with lotteries in selecting 'lucky' numbers and negotiating to provide a range of services to a number of temples.