Covid-19 has increased Hong Kong-listed apparel group Bossini’s loss attributable to shareholders by 174 per cent from last year to US$48.85 million.
Sales for the 12 months to June 30 hit $141 million, down by 27 per cent, and gross margin fell to 49 per cent, from 52 per cent last year.
“Since 2019 the economic environment of the core markets in which the group operates, comprising Hong Kong and Macau, Mainland China and Singapore, has been adversely affected by the Sino-US trade tensions, the local social incidents in Hong Kong and the global outbreak of Covid-19,” the business said.
“Social distancing, lockdowns, curfews and changing quarantines have created immense challenges for our retail operations. Moreover, major banks continue to tighten our credit facilities, and it is difficult to predict whether additional measures will be implemented by the banking sector in future.”
In response, the business is working to reduce its costs by “streamlining business operations”, and reviewing inventory levels and its store portfolio in an effort to exit loss-making sectors. Bossini said its rental expenses are “very unreasonable”, that it will focus on renegotiating leases, and that should landlords be reluctant to drop rent it will close stores.
Bossini’s new owner, Viva China Holdings, said it expects to continue facing headwinds in the short-term and that there isn’t enough information for it to form an optimistic opinion for the foreseeable future.