Lifestyle International : Announces 2021 Annual Results- Operating performance improved with effective marketing and promotion- More challenging 2022 as COVID-19 resurgence may severely hit HK economy

[For Immediate Release]

Lifestyle International Announces 2021 Annual Results

Operating performance improved with effective marketing and promotion

More challenging 2022 as COVID-19 resurgence may severely hit HK economy

	For the year ended 31 December
HK$'000	2021	2020	Change
Total sales proceeds	6,236,651	5,673,704	+9.9%
Revenue	2,289,573	1,993,024	+14.9%
(Loss)/ Profit attributable to owners	(1,305,000)	138,510	-1,042.2%
Adjusted net profit attributable to retail
operations*	857,076	801,197	+7.0%
(Loss)/ Profit per share - basic	(87.0) HK cents	9.2 HK cents	-1,042.2%

* Excluding net investment income/loss, fair value change of investment properties, exchange gain/loss and non-recurring items

(4 March 2022 - Hong Kong) Lifestyle International Holdings Limited ("Lifestyle International" or the "Company", together with its subsidiaries, collectively as the "Group"; stock code: 1212) , announces its annual results for the year ended 31 December 2021.

Hong Kong, the Group's home market, swung back to growth in 2021, but the maintenance of stringent border restrictions continued to freezeinbound tourism and curtailed the recoveryof the city's retail industry. Facing the challenging local-centric market environment, the Group agilely adjusted its marketing and promotion plans to boost sales to local customers and capture the opportunities brought by the consumption voucher scheme.

The Group's total gross sales proceeds increased by 9.9% and turnover rose by 14.9% thanks to an improvement of in-store customer foot traffic driven by easing of social distancing measures and the consumption voucher scheme. Notwithstanding an improvement in the performance of the Group's core department store operations, the Group's full year results swung to a net loss of HK$1 ,305.0 million, as compared to a net profit of HK$138.5 million in the previous year. The net loss this year was caused by the significant amount of net investment loss being recorded, which was largely a result of the unrealised fair value loss on the Group's holdings of certain equity and debt securities. Adjusted net profit attributable to the Group's core retail operations increased 7% to HK$857.1 million from HK$801.2 million in 2020, primarily as a result of sales growth.

In view of the challenging retailing operating environment and protracted market uncertainties, the board of directors has resolved to not recommend payment of the final dividend.

Leveraging on the Group's strong brand equity and successful marketing campaigns introduced to drive patronage and spending alongside a low comparison base, the flagship SOGO Causeway Bay store resumed growth with sales increased by 11.1 %. Meanwhile, sales of the tourist-dependent SOGO Tsim Sha Tsui store only managed to grow 1.6% as strict border controls remained in force during the year.

To stay competitive in the rapidly evolving retail market, the Group doubled down on digitalisation and further enhanced the overall experiences of its SOGO eStore, while continuing to strengthen customer loyalty and entice more customer spending by leveraging its well-received SOGO Rewards program.

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Lifestyle International Announces 2021 Annual Results

4 March 2022 / Page 2

Separately, the Group extended the lease period of its London-based commercial property by an additional 18 months to May 2024, further securing a stable rental income stream for the Group in the foreseeable future.

The construction works of the Group's Kai Tak Project have been progressing smoothly as scheduled and the two towers are expected to be topped out by the second quarter of 2022. Upon completion, the twin towers will host a SOGO department store along with other complementary retailing, entertainment, dining and lifestyle servicing facilities. Preliminary leasing works have already commenced and the Kai Tak retail complex is expected to be in business by the end of 2023. The Group believes that the retail complex will become a new landmark in East Kowloon and will further fortify its leading position in the Hong Kong retailing market.

Commenting on the results, Ms. Kam Shim Lau, Executive Director of Lifestyle International, said, "2021 witnessed a year of global economic recovery from the previous year's lockdown recession. Hong Kong's retail sales rebounded on gradual easing of social distancing measures and a low comparison base, however the aggregate sales value of a predominantly local-centric retail market remained far below the pre-pandemic levels with strict border controls still in force."

"Looking ahead, with strict border controls remaining enforced, we foresee 2022 would be a much tougher and uncertain year for both the retailing industry and economy of Hong Kong, particularly with the recent outbreak of the Omicron variant that has severely disrupted normal daily activities, further dealing a heavy blow upon the local economy."

Ms. Lau concluded, "Should the COVID-19 resurgence persist for a long period, the local retail market will face a further downturn this year. Under current circumstances, the chance of a border re -opening within the first half of 2022 is slim. Even with the re-opening of borders, taking into account the significant changes in global economic dynamics and a permanently altered retail landscape, a recovery of Hong Kong's retail industry back to pre-pandemic levels remains elusive."

"In spite of these challenges, the Group continues to have faith in the future of Hong Kong and is confident in its eventual long-term recovery as we believe the integration of Hong Kong within the Greater Bay Area, alongside the continued support from China will offer the region immense potential in the coming years. With our solid brand equity and long-term business strategy, we are convinced that the Group is favorably placed to leverage upon this wider economic context."

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About Lifestyle International

Lifestyle International is a successful lifestyle department store operator. The Group operates SOGO department stores in Hong Kong, namely Causeway Bay and Tsim Sha Tsui, with mid to upper -end market positioning. Characterized by the 'one-stop shopping' concept and unparalleled brand equity, the Group's department stores offer a wide variety of goods ranging from daily necessities to luxury products as well as personal care services, including beauty salons, in a comfortable and pleasurable shopping environment.

For further information, please contact: iPR Ogilvy Ltd.

Gary Li / Lorraine Luk / Angela Poon

Tel	:	3170 6753 / 2169 0467 / 3920 7656
E-mail	:	[e-mail]