Bra wars hit revenue for intimate women’s apparel group Cosmo Lady for its first half, in which it achieved just 0.2 per cent growth.
It says it did not fully anticipate the intensity of competition from new challenger Micronet, so did not respond fast enough to address the threat. During the reporting period, the competitor was able to react quickly to a surging demand for seamless and wireless bras while Cosmo Lady had a shortage of these products.
Consequently, despite being committed to expansion, the group managed to achieve RMB2211,369,000 (US$330.9 million) in revenue, with same-store sales growth maintained at a low single digit.
On the profitability side, running expenses continued their increasing trend. However, the completion of the group’s Dongguan central logistics centre last year enhanced logistics capability and efficiency, at the cost of a general increase in most categories of general and administrative expenses.
In spite of the challenges of the half, the group has adopted defensive measures. It has sped up the closure of low-efficiency outlets, postponed store openings and further integrated and enhanced its supply chain management.
As at June 30, the group’s distribution network comprised 8371 retail outlets, of which 6803 were franchised and 1568 self-managed – 238 outlets fewer outlets than at the same time last year. This was attributable to 323 fewer franchised outlets partially offset by 85 more self-managed stores.