With revenue totalling HK$1.9 billion (US$245 million), Hong Kong-listed retailer Trinity Group lost HK$88.5 million last year.
Trinity Group, which sells premium menswear brands in greater China and Europe, says it continued to be dragged down by the dampened consumer spending environment in China, but has implemented business reforms as well as restructuring aimed at improving its position long term.
As well as the slower growth in China, its main market, the group also lost money with one-off restructuring costs and the impact of the RMB’s depreciation.
Trinity Group, a Fung Retailing company, owns the Cerruti 1881, Kent & Curwen and Gieves & Hawkes brands and manages D’Urban under long-term licence in Greater China.
CEO Richard Cohen says while the group took measures to mitigate against the expected lower consumer spend, the impact on same-store sales in the last quarter was far more significant than the retail sector predicted. However, the group’s overall performance was in line with that experienced by the wider high-end and premium retail sectors.
“Our results, along with others in the industry, are disappointing but not wholly unexpected. Looking forward, we believe there are significant international wholesale, franchising and retail opportunities for the group in the long term.”
Efficiency measures by the group last year included improvements to sourcing and inventory management. This involved a consolidation restructure, including moves to further reduce staff costs, which resulted in one-off full-year costs of HK$60 million.
Fifty non-performing stores were closed, reducing the group’s outlets from 399 at the end of 2014 to 349.
Cohen says the group was able to maintain gross-profit margins above 70 per cent despite the difficult retail environment.
While maintaining its focus on the Chinese consumer, Cohen says the Trinity Group has revised its global strategy.
“The growing middle class in China is increasingly travelling abroad, so our strategy is to continue to engage with these core customers when they travel, while also reaching out to new clientele.”
Related to this strategy, the group signed an exclusive five-year agreement in September that will see international sports icon David Beckham play a multifaceted role in driving Trinity’s Kent & Curwenbusiness globally.
