Bosideng, the largest down apparel company in mainland China, says sales slumped nearly 20 per cent in the half year to September 30 as its store network shrunk and Chinese tightened their purse strings.
March to September is the low season for down apparel sales and the group mainly sold off-season products. But revenue of down apparel decreased 19.2 per cent year on year to RMB1.418 billion ($US236 million). Sales volume of branded down apparel decreased by 8.2 per cent year on year to six million units, which the group says was mainly due to reducing inventory and production volume.
Gao Dekang, Bosideng’s chairman, said China’s apparel industry continued to face challenges, such as over-capacity, inventory backlog and excessive expansion of retail networks in the past.
“The apparel enterprises, however, had been generally well aware of the problems and already proactively adjusted their businesses in response. In addition, the apparel industry continued to put efforts to explore sales channels apart from the traditional ones. For instance, it is promoting the interaction between online and offline channels to adapt to new mode of consumption.
“Bosideng will strive to stay up to date on the market trends and thus enhance the competitiveness to maintain a sustainable and healthy growth for the long term.”
As at the end of September, the net number of retail outlets decreased by 3436 to 8216, and the percentage of self-operated retail outlets in the entire retail network increased to 42.8 per cent from 32.8 per cent recorded as at the end of March 2014.
“The number of retail outlets decreased mainly because the group assessed regions and business districts and streamlined and consolidated the retail network of its down apparel brands during the low season to avoid the overlapping of the channels, in order to rationalise its retail network,” the company said.
“In addition, the group also closed stores which failed to meet its sales expectations or unable to meet its requirements in terms of brand image and services.”
During the period, the group’s total revenue increased by 1.4 per cent year on year to approximately RMB2,849.5 million. The increase of revenue is mainly attributable to a 54.8 per cent rise from the OEM management business, as a majority of orders in the 2014/15 financial year was completed and delivered by the end of September.
However, the group focused on clearing the inventory in the down apparel business, as well as repositioning the brand and proactively adjusting the retail network.
