Giordano cites ‘sluggish’ Hong Kong- Macau market
Apparel retailer Giordano says sales growth in its key Hong Kong and Macau market has become “increasingly sluggish”.
While the year started well, “inclement weather and fierce competition have hindered performance so far,” chairman and CEO Peter Lau said in the company’s half-year results announcement.
“But we are confident the experienced local management team will continue to reduce costs and devise creative campaigns to outperform our competitors. This market will also continue to serve as a new idea incubator and talent development centre,” he said.
Group sales for the first half of this year were HK$2.86 billion (US$364 million), up 9.2 per cent on the same period last year. Comp-store sales and comp-store gross profit rose by 5.1 per cent and 3.1 per cent, respectively.
Post-tax profit was HK$254 million, an increase of 3.7 per cent, with net profit margin easing by half a percentage point to 8.9 per cent.
Lau said the company was optimistic about its outlook for Giordano’s Mainland China business.
“Performance in the first half … has been flat and there is some degree of uncertainty surrounding the impact of the Sino-US trade war in the imminent future. That said, our e-commerce business in China continues to perform better than the group’s average and there has also been an improvement in the performance of both our franchisees and our [stores]. We anticipate that our store network will continue to expand, but we will monitor the pace and scale in view of the macroeconomic conditions.”
Giordano finished the half year with 2444 stores, equivalent to 2.331 million sqft of retail space throughout Asia-Pacific, 1293 of those standalone stores.