Despite lower sales, Nanjing-based fashion retailer Ever-Glory International Group managed to increase its total gross profit for last year by 5.8 per cent, with its retail gross profit rising 10.2 per cent.
Total sales were US$421.4 million, an 8.4 per cent drop from $460.1 million in 2014, mainly because of falls in its wholesale (8.8 per cent) and retail (8.1 per cent) segments.
Retail sales from the company’s branded fashion apparel retail division fell to $224.8 million, compared with $244.7 million for the previous year, mainly because of lower same-store sales and the closure of some stores.
Wholesale sales dropped to $196.6 million from $215.5 million, mainly because of lower sales in Germany, the UK, Europe and Japan, partially offset by increased sales in China and the US.
However, total gross profit grew to $129.3 million from $122.2 million, and retail gross profit rose to $94.4 million from $85.6 million. The wholesale segment saw its gross profit subside from $36.3 million to $34.9 million.
A soft global economy and Chinese retail conditions led to a challenging consumer environment, impacting sales, says Ever-Glory president/CEO Yihua Kang.
“Nevertheless, our product development and supply-chain management capability continued to gain recognition among high-quality, mid-to-high-end wholesale customers, both domestically and internationally.”
Every-Glory kept its focus on expanding its retail network, opening 228 stores in China during the year. It also optimised the network by closing 270 underperforming stores and remodeling or relocating 216 stores.
Following the introduction of two new retail brands in 2014, Sea to Sky and Velwin, and the introduction last year of Idole, the group had a network of 1159 retail stores across more than 300 cities in China at the end of the year. This year the group plans to pursue its multi-brand strategy to increase competitiveness and market share.
“While we expect economic pressures to persist, we remain optimistic regarding our future growth opportunities,” says Kang.
“We are pleased with our improvement in gross margin from the previous year,” says CFO Jason Jiansong Wang. “While the market weakness impacted our topline results, we enacted several strategic initiatives throughout the year, including increasing marketing and promotional activities and developing online channels.”
Ever-Glory was the first Chinese apparel company to list on the American Stock Exchange, in 2008, and it transferred to The Nasdaq Global Market at the end of 2014.
