Hong Kong-based casualwear retailer Bossini on Tuesday said revenue for the six months ended on 31 December 2013 dropped 5 percent to HKD1.27b (USD163.7m) from HKD1.33 billion in the same period of previous year, even though its Hong Kong and mainland China retail operations reported double-digit increase in same-store sales. Gross profit dropped 1 percent from HKD636 million to HKD628m.
The apparel retailer attributed the sales decline to the consolidation of its non-performing stores in mainland China and Taiwan. An economic slowdown in Asia during the first half of financial year (FY) 2013/14 and deteriorating conditions in the apparel retailing industry also put pressure on Bossini as more players entered its core markets.
During the first half of FY2013/14, Bossini opened 30 stores and expanded its footprint to 3 countries. By the end of 2013, it had presence in 40 countries and regions worldwide with 278 directly managed stores and 717 franchised stores.
However, its store count dropped 22 to 995 due to the progressive consolidation and closure of non-performing stores in mainland China and Taiwan. It closed 47 shops in mainland China – particularly in the northern and central regions, leaving the total store count to 253. Seven stores were closed in Taiwan as low demand and poor consumer confidence weighed on the challenging apparel market.
"The global economy finally appears to have reached a turning point with a renewed sense of cautious optimism in 2014. However, throughout the region, the retail environment is still highly competitive as some of the world’s renowned brands have been drawn to invest in new markets and increasingly more foreign and local brands have been expanding their operations, which has increased competition, stifled sales and prolonged the extensive discounting taking place in some markets. Furthermore, we foresee that the inventory adjustments and destocking process undertaken by some apparel retailers could linger for some time," Edmund Mak, CEO and Executive Director of Bossini said in a statement.
"The group will continue its expansion into export markets with good potential for growth and persist with initiatives to enhance store productivity, particularly in mainland China and Taiwan. We will continue to partner with well-known brands to launch co-branded and licensed clothing and merchandise to extend and enhance our brand visibility," he added.