Currency, tourism hits Bossini profit
A strong Hong Kong dollar and fewer tourists to Hong Kong and Macau hit profits for Hong Kong-listed fashion group Bossini International Holdings for the six months to December 31.
Revenue dipped 13 per cent to HK$1146 million (US$147 million) from $1319 million for the same period in 2014. The gross profit was $543 million ($665 million in 2014), with the Bossini profit attributable to owners sliding from $87 million to just $14 million.
However, the group says its financial position is still healthy despite an unseasonably warm winter in several core markets and more fierce competition within the apparel retail industry.
In Hong Kong and Macau, same-store sales declined by 14 per cent, opposed to a 5 per cent growth for the 2014 period. Same-store sales in mainland China dropped by 8 per cent (as against 2 per cent growth), while Taiwan and Singapore same-store sales declined 14 per cent (2014: 8 per cent growth) and 1 per cent (2014: flat) respectively. Overall, same-store sales for the group fell by 12 per cent, following 4 per cent growth for the same period in 2014.
At reporting date, the group had outlets in 33 countries and regions – 267 (down 10 on June 30, 2015) directly managed stores and 678 (681) franchised stores, giving a total store count of 945 (938).
Its export franchising business continued to expand with 15 new franchised stores, taking the total to 615 stores across 29 countries. The group also continued launching its licensing programs, a major strategy, including a Star Wars collection and a further collaboration with the Ocean Park Halloween Bash.
CEO and executive director Edmund Mak says the group expects the demand for value-for-money apparel to grow as economies slow globally.
“To cope with this, we intend to offer more items that are easy for mix-and-matching, as well as products with better functions under a more competitive pricing strategy over the coming years.
“The group will also continue to implement further cost-control measures and focus on expanding operations further afield of Hong Kong and Macau to achieve a more balanced portfolio.
“We will also continue to devote energy to expanding our apparel lines for kids, which has consistently been our competitive edge and would also perfectly complement the recently announced end to the one-child policy in mainland China. Furthermore, we will launch Bossini eyewear in mainland China through franchise arrangements.
“Going forward, the Group will continue to create appealing, competitive and quality everyday wear that drives sustainable growth, profitability and customer satisfaction. With a firm focus on our “be happy” core brand value, we will continue to strengthen our competitive edge and endeavour to enhance the value that we offer to our shareholders.”