Hong Kong apparel retailer Giordano blamed the challenging Chinese market for a poor performance in the first half.

Giordano’s net profit decreased three per cent to HK$340 million (US$43.8 million) as global brand sales slipped two per cent.

Sales in the mainland China, where it closed 180 stores, fell seven per cent due to volatility in consumer demand and intense competition.

“Mainland China markets remain challenging. International brands are steadily increasing their presence and local brands are proliferating as retail space continues to grow faster than consumer demand,” said chairman and CEO Peter Lau Kwok Kuen.

Other markets, including Malaysia, Thailand and Indonesia, contributed an EBIT of HK$8 million, up six per cent.

The retailer is pinning hope on its newly established Middle East business which it says offers exciting prospects for long term growth outside East Asia.

It will also widen its influence in Southeast Asia to offset slowing demand in China.

Giordano has a current store network of more than 2600 stores and counters in Greater China, South Korea, Southeast Asia, Australia, India and the Middle East.