Menswear retailer China Xiniya Fashion says its second quarter sales nearly halved this year.
Revenue during the second quarter of 2015 decreased by 47.2 per cent to RMB106.4 million, compared to RMB201.7 million in the second quarter of 2014.
Gross margin fell from 27 per cent to 20.8 per cent and the company turned a pre-tax profit of RMB18.4 million into a loss of RMB8.7 million.
That despite the net addition of 31 authorised retail outlets ( 64 opened, 33 closed) taking the network to 635 as at June 30/
Despite the appalling firgures, chairman and CEO Qiming Xu managed a positive spin on the company’s situation.
“To further support and stabilise our retail network during this transition period, we implemented the second phase of our inventory buyback. We are beginning to see a definite positive impact on our business from the buyback initiatives and expect this progress to continue for the rest of the year,” he said.
“Confidence from our distributors and existing and prospective authorised retailers has improved, evidenced by the increase in orders from our sales fair and the net increase in number of authorised retail outlets.
“While we expect the economic environment to remain challenging, we are confident that our strategy to adjust our business will ensure the long-term sustainability of our business and brand.”
The company said its 2015 Winter Collection Sales Fair in June in Xiamen City, showcased more than 500 new products. Orders increased 15 per cent over last year’s figures.
Of the reduced margin, the company observed: “The decrease in gross margin was primarily due to an increase in research and development expenses as a percentage of total sales in the second quarter of 2015 and a decrease in retail prices to improve the price competitiveness and attractiveness of the company’s products to consumers.”
Xiniya specialises in men’s business and casual apparel in China. It targets male working professionals in China aged 25 to 45 , seeking fashionable clothing to suit their working and lifestyle needs.
