Giordano is continuing to close stores in China as shoppers move to shopping online.

In its last quarter of trading, the Hong Kong based retailer saw sales fall from HK$1.333 billion (US$171.9 million) to HK$1.283 billion (US$165.5 million) year on year. Net profit fell seven per cent to HK$743 million (US$95.83 million) and operating cashflow slumped 47 per cent to HK$85 million (US$10.96 million).

Giordano closed 74 retail stores in the quarter – 63 of them in mainland China. That takes its net store closures to 165 mainland shops in 12 months, 41 one of them directly owned and the rest franchisees.

The root cause of the company’s troubles is that mainland China’s apparel market has reached saturation point with a proliferation of brands in Giordano’s space – high volume, low price and low margin casual clothing which many consumers are now opting to purchase online where they can have more choice and fast delivery.

At the same time, Chinese are tightening their wallets, affecting not just the top end of town, but value brands as well.

Some Giordano stores are being converted into an even cheaper format, Beau Monde. Stores not being closed are being modernised as Giordano tries to create an ‘international look’ for the brand and its retail front end.

Giordano is not alone with its shrinking retail network. Chinese media report rival brand Septwolves has closed 347 shops in the first half of this year after shuttering 505 in 2013.

French brand Etam closed 88 shops in the first half of this year, Joeone has shut 73 and Canudilo has closed 53.