Hong Kong-based clothing retailer Giordano says it has no interest in expanding in Hong Kong citing high rents.
The company would only consider further expansion if retail rents really fall, says Peter Lau Kwok-kuen, chairman and CEO of Giordano.
Giordano’s net profit for the first half to June rose to HK$352 million (US$45.38 million) from HK$346 million (US$44.61 million) a year earlier. Total sales grew 1.8 per cent to HK$2.69 billion (US$346.79 million) while gross margin was down by 1.7 percentage points to 58 per cent dragged down by extensive stock clearance.
Sales in Hong Kong and Taiwan grew by three per cent while other markets including Malaysia, Singapore, Thailand and Indonesia grew four per cent.
Meanwhile, mainland sales decreased by four per cent, prompting the company to review its expansion and shut down stores which are not trading well.
“Looking ahead, the mainland remains the key market for the group’s growth strategy and we will expand our operations there as market demand starts to recover,” Kwok-kuen said.
He is optimistic the company will generate steady profit growth in the future as it undertakes measures to lower costs and improve efficiency.
Giordano’s worldwide network now numbers 2723 stores.