【For immediate release】 12 August 2015

S. Culture Announces 2015 Interim Results
Continue to strengthen business presence in the Greater China Region

(12 August 2015 - HONG KONG) S. Culture International Holdings Limited (the "Company", stock code: 1255) is pleased to announce the Company's interim results for the six months ended 30 June 2015 (the "Period").

The Group is an established wholesaler and retailer of lifestyle comfort footwear products for international brands, including "Clarks," "Josef Seibel," "The Flexx," and "Petite Jolie" across its current operating territories of Hong Kong, Taiwan and Macau. It has extended its foothold for some of these brands to the PRC market. The Group is also the operator of popular retail platforms selling multiple brands, namely "S.Culture," "SCOOPS" and "shoe mart." As at 30 June 2015, it operated 128 retail outlets, representing a net increase of 13 and 6 as compared to the total number of retail outlets of the Group as at 30 June 2014 and 31 December 2014 respectively.

Revenue of the Group's business for the Period was HK$269.4 million, representing a slight decrease of 7.6% (2014 interim: HK$291.6 million). Gross profit of the Group for the Period was HK$173.8 million (2014 interim: HK$187.3 million), with gross profit margin maintained at a healthy level of 64.5% (2014 interim: 64.2%). A net loss of approximately HK$4.6 million for the Period was resulted, mainly due to the continued sluggishness of the retail market in the first half of 2015 and some of the newly added retail outlets during 2014 and in the first half of 2015 were yet to break-even under the unfavorable atmosphere of the retail market during the Period.

Business Review

Sales of the major brands under the Group's exclusive distribution agreements for the Period compared with the even period of 2014, sales of "Clarks" footwear products had decreased by 12.1% and "Josef Seibel" had slightly decreased by 0.1%; while "The Flexx" and "Petite Jolie" footwear products had maintained favorable growth in sales of 27.0% and 48.2% respectively, encouraging performance indicators that reaffirm the Group's strategy in introducing and cultivating quality brands in its target markets.

Continue to expand business in the Mainland China and Taiwan

Revenue of the Group's core retail business for the Period was HK$245.9 million, representing a 8.6% decrease from HK$268.9 million of the even period of 2014, which was mainly due to the prolonged sluggishness of consumer market in Hong Kong, resulting from the declining spending sentiments of the local consumers and tourists from the Mainland China under the prevailing economic and social conditions.

However, Hong Kong is still contributing a majority of sales to the Group's retail operations as there were 73 retail outlets in the city as at 30 June 2015 (31 December 2014: 70). As part of the strategies, the Group considered to relocate certain retail outlets to other prime shopping locations with lower rentals. In this regard, the Group continued to maintain the operating expenses at a stable and reasonable level with respect to the sales made and to respond promptly to the ever-changing market conditions.

In Taiwan, the Group increased the number of its retail outlets to 51 during the Period (31 December 2014: 49). Excluding the effect of translating Taiwan dollars into Hong Kong dollars, revenue generated from Taiwan had experienced an increase of approximately 1.5% for the Period. The Group continued with strategy in Taiwan by identifying and increasing its retail outlets in selected department stores in the latter half of 2015.

In Macau, the Group maintained its scale of operations with two retail outlets as at 30 June 2015. For the operations in Mainland China, the Group continued to implement the strategies to strengthen its business presence in the Mainland market. Towards this goal, the Group continued to open its concession counters under the brands of "Josef Seibel and "The Flexx", and actively collaborate with its local and experienced business partners to expand its retail network and capture its target customers in the cities of the Mainland China. As at 30 June 2015, the Group had 2 retail outlets (31 December 2014: 1 retail outlet) and 6 points of sales (31 December 2014: 5) for its products under the brands of "Clarks," "Josef Seibel," "Petite Jolie" and "The Flexx" in the cities of Shanghai, Qinhuangdao, Haikou, Qingdao, Songyuan, Zhengzhou and Harbin. The management expected to record growth in both the number of point of sales and sales revenue in Mainland China in the foreseeable future.

Prospects

The Group is bearing a conservative outlook towards the Hong Kong retail market in the second half of 2015. In this regard, the management will pursue precise operating tactics to rationalize its retail network and to monitor its costs of operations. The Group is keen and cautious to identify suitable target locations and cities to expand its scale of operations in the Mainland China. Aside from operating under physical retail outlets, the Group will also explore new business opportunities and initiatives such as viable online sales platforms and marketing channels to increase its market shares in the Mainland China. The Group anticipates that the embarking on omni-retailing channel can help it to unearth potential opportunities and growth areas there.

Mr. Dominic Chu and Mr. Haeta Chu, Co-Chief Executive Officers of the Group commented, "Despite experiencing enormous challenges in the retail markets during the Period, we believe that the Group's solid foundation in its abundance of experience and exclusivity of branded footwear distributorship, dedication in pursuing excellence in product and service quality and active promotion of sustainable business development strategies shall guide the Group to cut through the challenges and seize the opportunities during market recovery in the foreseeable future."

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About S. Culture International Holdings Limited
S. Culture International Holdings Limited is the exclusive distributor and retailer of numerous renowned international lifestyle comfort footwear brands including Clarks, Josef Seibel, The Flexx and Petite Jolie. With an operating history of more than 50 years, S. Culture has established an extensive sales network of 128 retail outlets strategically located in Hong Kong, Taiwan, Macau and the Mainland China. The retail outlets are operated under the trade names of S.Culture, shoe mart and SCOOPS, as well as the children and family footwear under the trade names of "JS & Family" and "SC & Family" and individual brands such as Clarks, Clarks Originals, Josef Seibel and The Flexx, catering for a wide customer base.

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