Hong Kong-based clothing retailer Giordano has reported a slight decline in the first quarter gross profit as sales weaken and margins came under pressure.
Giordano’s gross profit decreased 0.9 per cent to HK$816 million (US$105.08 million) over the quarter ended March 31. The company’s sales for the first quarter of 2012 increased by 1.2 per cent to HK$1.432 million (US$184,410.09) from HK$1.415 million (US$182,220.87) in the same period last year.
Sales in mainland China decreased by 9.1 per cent, as demand weakened and franchisees reduced inventory levels. In Hong Kong and Taiwan, sales grew by eight per cent compared to the same period last year. Sales in the rest of the Asia Pacific region, mainly Singapore, Malaysia, Indonesia and Thailand, grew by 5.6 per cent compared to the same period last year.
“We have now raised the bar in terms of sales and earnings performance and are working hard to improve these results. This year we see strong headwinds in our markets, particularly China, which make this goal particularly challenging” said Lau Kwok Kuen, Peter, chairman and CEO of Giordano.
Lau said that mainland China remains the key market for the company’s growth strategy. Giordano’s design centre in Dongguan now develops products directly aimed at Chinese consumers.
Significant growth is also expected across Hong Kong and Taiwan and in developing markets in South East Asia, such as Indonesia.
“Our innovative and exciting partnership with Disney in Greater China shows that our product design and marketing expertise is continuously improving. Management teams in these markets are well placed to take advantage of economic development and growth in these regions on the back of strong operational excellence and effective work processes already established in these businesses” said Lau.
He is optimistic the company will deliver growth for the rest of 2012.
Founded in 1981 by Jimmy Lai, Giordano is an international retailer of men’s, women’s and children’s apparel under the brand names Giordano, Giordano Ladies, Giordano Junior, Concepts One and BSX.
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