Online sales boost for Giordano International
E-commerce has helped boost the first-quarter bottom line for Hong Kong-based clothing retailer Giordano International, particularly in China.
Unaudited figures for the three months to the end of March show Giordano’s overall e-business generated HK$81 million (US$10.3 million) in revenue, representing a year-on-year increase of 44.6 per cent. Of this, Mainland China accounted for 87.9 per cent, with sales growth of 28.9 per cent.
Giordano says growth momentum continued for the mainland. “The development of the two strategic channels of e-commerce and franchising were on track and will continue to be our growth drivers in the medium term.”
Same-store sales (CSS) rose by 16.7 per cent despite 30 non-performing stores being closed in the past 12 months.
A decline in gross margin by 1.3 points can be attributed to greater sales contribution from e-business, says the company.
In Hong Kong and Macau, sales for the first quarter increased by 3.8 per cent, resulting from same-store sales growth of 9 per cent partly offset by the closure of a major non-performing store. Gross margin was down by 0.9 points as a result of a longer promotion period for the late Chinese New Year.
In a rebound since last year’s second quarter, Taiwan grew same-store sales by 19.6 per cent and comparable store gross profit (CSGP) by 25.1 per cent.
In the rest of Asia Pacific, sales increases mainly came from store expansion in Indonesia and the acquisition of its Vietnam business since July, which contributed to 5.9 per cent of the region’s sales.
Despite a tough macro environment, other Southeast Asia markets delivered stable sales growth. Excluding the Vietnam acquisition, gross margin would have dropped by one point.
South Korea – a 48.5 per cent JV under an independent management team – continued to deliver positive CSGP growth.
“Inventory rationalisation and lower product costs through shared sourcing have contributed to a substantial gross margin improvement.”
Overall, group sales for the quarter rose by 13.4 per cent to $1.4 billion while group gross profit grew by 12.5 per cent. Same-store sales and CSGP for the quarter grew by 9.5 and 8.7 per cent respectively.
As at the end of March, the group had a network of 2414 outlets, of which 1271 were standalone stores – an increase of 40.