Giordano International profits slip
Hit by low sales, weak currencies and even unseasonal weather, fashion retailer Giordano International saw its gross profit for the latest quarter slip by 6 per cent to HK$754 million (US$97.1 million), compared with HK$798 million for the same period last year.
However, its gross margin increased 2.5 per cent to 57.78 per cent. Gross profit declined by HK$44 million, or 6 per cent, to HK$754 million (HK$798 million last year).
Hong Kong and Macau sales dipped 7 per cent, and coupled with the closure of five non-performing outlets, the gross profit in the two territories decreased by 5 per cent. There are now 71 outlets, and some may be re-opened when Hong Kong rents reach a “reasonable level”.
Weak consumer sentiment and cooler spring weather depressed sales in China by 12 per cent.
Over the past 12 months, 51 outlets were closed. The number of directly run stores decreased by 90, while there were 39 more franchised stores. During the quarter, 10 franchised stores were added in line with the group’s strategic focus to develop its franchise network in third- and fourth-tier Chinese cities.
Giordano’s eCommerce business continued to grow, accounting for 10 per cent of China’s brand sales during the quarter. With better pricing discipline, it delivered 34 per cent gross profit growth compared to the same quarter last year.
Sales in Taiwan were flat, and sales in Singapore eased by 1 per cent. Sales in Indonesia grew 17 per cent with five new outlets, sales in Thailand increased by 18 per cent, and the sales demand in Malaysia had been high before GST was implemented in April last year, with the latest quarter seeing a 5 per cent drop.