Apparel retailer Bossini has weathered Hong Kong’s retail downturn by achieving strong growth offshore.
The Hong Kong based company has revealed its annual results in the year to June 30, reporting a mere one per cent decline in sales to HK$2.523 billion, and a three per cent decline in gross profit to HK$1.264 billion with gross margin down one per cent to 50 per cent. profit attributable to shareholders fell nine per cent.
“During the fiscal year 2014/15, despite facing challenging retail conditions in Hong Kong and Macau, its segmental business, which includes the export franchising operations, registered record-high sales with flat same-store sales growth for the directly managed stores,” the company said.
“The operations in mainland China, Taiwan and Singapore all experienced improvements in segment results, resulting from the continuously improving shop productivity and stringent cost control measures. Mainland China segment achieved six per cent same-store sales growth and also recorded nine consecutive quarters of positive same-store gross profit growth. Taiwan segment saw a same-store sales growth of seven per cent, representing seven consecutive quarters of positive same-store sales growth.”
Bossini ended the year with a presence in 35 countries and regions and a store count of 938 (down 24). Of those, 257 were directly managed stores and 681 were franchised.
One factor in the group’s improved operational efficiency was a small reduction in inventory turnover timetable from 84 days to 83.
Looking forward, CEO Edmund Mak said the group will benefit from lower production cost if US dollar remains strong versus Renminbi.
“Besides, it is estimated that rents will fall in certain areas in Hong Kong as retailers are generally suffering from sales downturn, which could help partially offset the group’s ongoing difficulties. The group will be proactive in taking stringent measures to control costs, including rental costs, and continue to improve shop productivity. The group aims to remain flexible and responsive to changing market conditions.”
Mak said Bossini sees grounds for “considerable optimism” in its overseas operations.
“Therefore, we will focus more on expanding operations outside Hong Kong and Macau, in order to achieve a more balanced portfolio. Furthermore, we will continue to expand kids’ line, particularly in Mainland China, while launch co-branded and licensing programmes of clothing and accessories via partnerships that reinforce the core brand value ‘be happy’, striving to build “bossini”’s reputation as a vibrant, valued and competitive go-to brand.”
