Bossini International says it is negotiating rent reductions in all markets, especially in Hong Kong and Macau, as sales continue to be impacted by the Covid-19 pandemic and soft local demand.
The apparel retailer’s revenue slumped 39 per cent to US$25.5 million during the three months to September, with gross profit down by 42 per cent.
In a stock-exchange filing, the company’s chairman Victor Herrero said the Covid-19 pandemic had critically affected tourism- and consumption-related sectors, resulting in slower growth or even contraction in retail sales.
“However, there has not been a proportionate decrease in the group’s rental expenses, with several landlords still unwilling to provide rent concessions despite the current retail environment.”
He said rental expenses remained “at a very unreasonable level” and in cases where landlords would not accede to rent relief or reduction, the company would close stores.
“Should such a tough operating environment persist, we will substantially scale down our business operations in Hong Kong and Macau accordingly.
“Furthermore, the company continues in adjusting its buying and inventory levels, and is continuously reviewing its shop portfolio comprehensively and exiting any specific loss-making sectors.”
Meanwhile, Bossini’s inventory turnover had increased to 192 days by the end of the quarter, two days higher than at the same time last year. Gross margin was down two points to 47 per cent.