La Chapelle sales slumped 21 per cent in the first quarter to RMB2.372 billion (US$352 million) as the Hong Kong-listed fashion retailer continued its restructuring.

The troubled retailer has closed 1877 loss-making and inefficient stores in the past year, leaving it with 9540 at the end of March, and representing the shuttering of one in five directly operated outlets.

Net profit attributable to shareholders plunged 94.4 per cent to RMB9.751 million (US$1.44 million).

In a shareholder update, La Chapelle said weak consumer confidence and the continued overall negligible growth of apparel spending compared with the second half of last year had also impacted on sales in the March quarter.

According to the National Bureau of Statistics data, Mainland China sales of shoes, hats and apparel grew by just 3.3 per cent year on year, a rate five percentage points less than the growth rate of all consumer goods sales.

“Furthermore, the Chinese New Year holiday of 2019 was 11 days earlier than that of 2018, which had an adverse effect on the sales of winter products for the first quarter. The revenues of the ladies’ apparel brands such as La Chapelle, Puella, 7 Modifier as well as La Babite for the first quarter had a year-on-year decrease of 26.65 per cent, 29.76 per cent, 22.91 per cent and 23.06 per cent respectively, which is mainly due to the decrease in direct-sale stores, the change in numbers of ultimate consumers, and the increase in proportion of sales of obsolete inventories,” the company said.