May 5, 2016
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Giordano Q1 profits fall 6% on low sales, shutters 5 stores

May 5, 2016

Fashion retailer Giordano International saw first-quarter gross profits slide 6% compared to the same period last year. The Hong Kong firm attributed the profit drop to low sales, weak currencies and unseasonal weather.

Giordano Q1 gross profit fell 6% - Facebook/Giordano

Giordano's gross profit for the latest quarter slipped by 6% to HK$754 million (US$97.1 million), compared with HK$798 million for the same period last year. However, its gross margin increased 2.5% to 57.78%.

Gross profit in Hong Kong and Macau decreased by 5%, couple a sales dive of 7% across the two territories. Giordano shuttered five non-performing outlets in the Asian region, taking its store number to 71 outlets. Giordano advised some may be re-opened when Hong Kong rents reach a “reasonable level”.

Sales in China plummeted 12%, pushed by weak consumer confidence and cooler-than-usual spring weather. During the quarter, 10 franchised stores were added in line with the group’s strategic focus to develop its franchise network in third- and fourth-tier Chinese cities.

Sales in Taiwan were flat, while sales in Singapore skipped on by 1%. Sales in Indonesia grew 17% with five new outlets, sales in Thailand increased by 18%, and sales in Malaysia went down 5%, affected by the introduction of GST in April last year.

Giordano’s e-commerce business accounted for 10% of China’s brand sales during the quarter. It delivered a 34% gross profit growth compared to the same quarter last year.

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