Financial & Commercial Structures - Merchants
Wine retailers have generally lower turnover revenues, some retailers will make up the profit by increasing the profit margin. But the cynical nature of the retail business makes it harder to achieve consistent profitability. For instance, Madison Wine, a public listed company, operates a low premium to fine wine retailer network in Hong Kong and China. They reported a loss of 9.4 million (HKD) or 1.2 million USD in 2016, a massive drop from a net profit of 14.2 million HKD in 2015. They did have a consistent gross margin of 32% for last three years but the rise in rental charges and wages kept trimming their net profit.
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