Hong Kong fashion retailer Portico International – formerly Ports – says it has faith its new generation store formats are the way of the future.
The company has just reported an 11.3 per cent decrease in first half sales from RMB 877.2 million last year to RMB 778.5 million this year. Retail gross profit decreased by 11.7 per cent from RMB 755.6 million to RMB 667.5 million and its gross profit margin from 86.1 per cent to 85.7 per cent.
“The anti-extravagance campaign of the PRC government has continually impacted on the consumption appetite for luxury goods in the PRC, which has attributed to [the] reduction in sales,” explained executive director Alfred Chan in a stock exchange filing.
But he says, while the first half of 2015 was an extension of the tough period which started from early 2014 for most, if not all, retailers engaging in the luxury goods sector, Portico had not slowed down its momentum in the development of its business.
“The grand opening of our upscale retail store on Canton Rd, Hong Kong and the trial opening of our equally lavishly decorated store on Nanjing Xi Lu, Shanghai were ample evidence of our commitment to the brand amid the challenging environment for luxury retailers,” said Chan.
“The company remains cautiously optimistic in respect of the long term prospect of the luxury retail industry in the PRC and as such, we consider it essential for us to have the perfect venues to showcase a complete merchandise portfolio and fashion concept of the brand to our customers and potential customers.”
Since the two new flagships opened, Portico has received encouraging feedback and support “from our fans, fashion lovers, industry peers and celebrities, which serve as very significant endorsement to the approach of the company in the course of the development of our brand”, he said.
As at June 30, the company operated 311 retail stores in the PRC, Hong Kong, the US and Canada, one more than at the end of 2014.
Retail accounts for 91.8 per cent of Portico’s total business.