Urban apparel brand Bossini’s 25th year was a challenging one as the global economic downturn hit the retailer’s bottom line.
Hong Kong-headquartered Bossini reported an 88 per cent slump in profit to HK$16 million (US$2.06 million) in the year ended June 30. Gross profit declined four per cent to HK$1.29 billion (US$166.3 million) from HK$1.35 billion (US$174.12 million) in 2011 while gross margin lowered to 47 per cent due to the intensified competition and a temporary surge in production costs.
Revenue for the year reached HK$2.74 billion (US$353.4 million), four per cent above the previous fiscal year.
Bossini’s operation in mainland China was seriously affected by the economic slowdown and “macroeconomic uncertainties”. Government policies to control inflation have slowed domestic demand.
Its operating loss in the mainland widened to HK$156 million (US$20.12 million) from HK$58 million (US$7.48 million) a year earlier, mainly due to the wind down of its underperforming ‘b.style de flyblue’ stores. Slowing demand, fierce competition and incomplete network expansion also contributed to the poor performance.
The group achieved profit growth in Hong Kong, delivering same-store sales growth of 13 per cent. Operating profit generated from the Hong Kong segment increased 11 per cent to HK$250 million (US$32.24 million).
Amidst these challenges, Bossini has been closing underperforming ‘Bossini’ stores. The group added 22 franchised stores in offshore markets taking the total to 543 as at June 30, including 19 stores converted after the group restructured its Malaysian business from a directly managed to an export franchising mode of operation.
Looking forward, the group says it plans to introduce a brand new store concept and partner with a supplier to enhance the supply chain capabilities and ensure quicker responsiveness to market trends. Details of the new concept were not disclosed.
“Our management team remains cautious but confident about the business outlook in the coming year. The spectre of deepening global economic woes is balanced for the group by its presence in the continuously growing Asian markets,” said Edmund Mak, executive director and CEO of Bossini.
Bossini has 1314 stores in 36 countries, 523 directly managed and 791 franchised. It offers a full range of casual wear apparel products for men, women, teens and kids.
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