Forex losses hurt Bossini recovery
Foreign exchange losses hobbled the recovery of Hong Kong-headquartered fast-fashion label Bossini.
In full-year results just released, Bossini reported a 3 per cent decline in total revenue to HK$1.958 billion (US$249.6 million), largely due to a decrease in sales from the export franchising business. However gross margin rose rose two percentage points to 53 per cent.
While same-store profit rose by 1 per cent, the company reported a loss attributable to shareholders of $29 million, compared with a profit of $5 million last year.
Mainland China and Taiwan were standout same-store sales performers, recording 6 per cent and 3 per cent growth for the year respectively. Bossini’s export franchising business added three new markets during the year: Laos, the Czech Republic and Rwanda, taking its footprint to 25 countries.
In a stock exchange filing, Bossini said its operating profits from its retail businesses in Hong Kong, Macau, Mainland China, Taiwan and Singapore all improved. Hong Kong and Macau account for about 50 per cent of the brand’s sales.
“Nevertheless, the group’s profit attributable to owners posted a decline mainly due to the foreign exchange fluctuation arising from Renminbi,” wrote chairman Man Kuen Bess Tsin.
“The decrease in the profit derived from the export franchising business, as a result of the continuously weak and competitive apparel retailing environment, was another reason for the drop.”
Same-store sales by market
Same-store sales in Hong Kong and Macau slipped 2 per cent and in Singapore by 5 per cent – well below the respective falls of 9 per cent and 11 per cent the previous year.
Same-store sales in Mainland China and Taiwan grew by 6 per cent and 3 per cent, a turnaround from drops of 5 per cent and 7 per cent last year.
Company-wide same-store sales fell 1 per cent compared with an 8 per cent drop last year.
As at June 30, Bossini had 938 stores internationally, 284 directly managed and 654 franchised. Its Hong Kong and Macau network held steady at 40.
During the year, it opened one new store in Taiwan, taking its network there to 64, and it closed two in Singapore, for a net 16.