Home / Knowledge / News / Apparel/Garments / Sales rise marginally at apparel retailer Giordano in Q1

Sales rise marginally at apparel retailer Giordano in Q1

30
May '12
Giordano International Limited released its 2012 first quarter operations update. The Group's sales for the first quarter of 2012 increased by 1.2% to HK$1,432 million from HK$1,415 million in the same period last year.

The relatively low sales growth over the first quarter of 2012 is partly impacted by a high base in the previous year. The first quarter of 2011 was almost a “perfect quarter” in our key markets in terms of weather, particularly in Mainland China.

To put sales in the first quarter of 2012 into a more normal context, sales were 27.5% higher than the first quarter of 2010.

Sales in Mainland China decreased by 9.1%, as demand weakened and franchisees reduced inventory levels accordingly. In Hong Kong and Taiwan, sales grew by 8.0% compared to the same period last year. Sales in the rest of the Asia Pacific region, mainly Singapore, Malaysia, Indonesia and Thailand, grew by 5.6% compared to the same period last year.

During the fourth quarter of 2011 and first quarter of 2012, the Company's suppliers increased the prices of merchandise for the 2011 fall-winter collection resulting in our merchandise costs increasing by 13.9% over the previous year; this was largely due to increases in fabric prices earlier in 2011.

The Company has maintained strong price disciplines across its markets in order to protect its gross margin and brand positioning; cost increases have been more than fully recovered. However, the Group's gross margin decreased by 1.2 percentage points to 57.0% year on year and gross profit decreased by 0.9% to HK$816 million from HK$823 million in first quarter 2011. Nevertheless, reductions in raw material prices during 2012 will reduce these cost pressures from the second quarter going forward.

Inventory turnover on sales was 29 days, an increase of 5 days from the same date last year but a reduction of 10 days from the 39 days at 31 December 2011. The increase in inventory level compared to last year reflects higher inventory costs and provisioning for new shops. Efforts to reduce inventory further are ongoing.

Net cash and bank balances increased by HK$301 million to HK$1,510 million during the quarter (31 December 2011: HK$1,209 million). The Group continues to generate strong cash flow driven by the reduction of inventories.

“During 2011 we delivered record sales and earnings for the Group on the back of solid and sustained growth across all our markets. We have now raised the bar in terms of sales and earnings performance and are working hard to improve these results.

“This year we see strong headwinds in our markets, particularly Mainland China, which make this goal particularly challenging” remarked Dr. Lau Kwok Kuen, Peter, Chairman and Chief Executive of Giordano.

“On the back of a cooling economy, customer demand is down across our Mainland China markets. Despite good progress in reducing inventory levels, there is stilla lot of oversupply in our market place. This is making it more difficult to maintain margins and to grow revenues as discounting by our competitors is widespread.


Must ReadView All

Pic: Shutterstock

Textiles | On 8th May 2021

French Development Agency to invest $83m in Ivory Coast cotton sector

Over a period of five years, the French Development Agency (AFD) will ...

Pic: Juki

Apparel/Garments | On 8th May 2021

Japanese companies collaborate to develop sewing machine business

Juki Corporation and Pegasus Sewing Machine Mfg have entered into a...

Pic: Rocky Brands

Apparel/Garments | On 8th May 2021

Rocky Brands expands Made in America capabilities

Rocky Brands has expanded the offering of its Made in America product ...

Interviews View All

Textile Industry, Head honchos

Textile Industry
Head honchos

We are staring at livelihood crisis for weavers

Textile Industry, Head honchos

Textile Industry
Head honchos

Virtual reality would be the new normal

Textile Industry, Head honchos

Textile Industry
Head honchos

Tech in fashion industry has hit acceleration button

Dhruv Toshniwal & Udit Toshniwal,

Dhruv Toshniwal & Udit Toshniwal

Launched a year ago, Fashions Pvt Limited conceptualises and sees D2C...

Chini Chouhan,

Chini Chouhan

Founded by Chini Chouhan, her eponymous brand specialises in women's...

Ujjval Saraf,

Ujjval Saraf

Founded by Jimmy Lai, Giordano International Ltd, a Hong Kong based...

Tiasha Renganathan, Twinery Innovations by MAS

Tiasha Renganathan
Twinery Innovations by MAS

Twinery-Innovations by MAS is the innovation arm of Sri Lankan company MAS ...

Hemant Bheda, Arevo

Hemant Bheda
Arevo

Arevo, based in Silicon Valley in California, develops technology to...

Sachin Pendharkar, Dieffenbacher India Pvt Ltd

Sachin Pendharkar
Dieffenbacher India Pvt Ltd

Germany-based Dieffenbacher Group is a producer of high-quality composites ...

Abhishek Bajaj & Samiksha Bajaj, Samshek

Abhishek Bajaj & Samiksha Bajaj
Samshek

Samshek is a fashion forward tech brand which combines digital experience...

Anjali Bhaskar, Samatvam

Anjali Bhaskar
Samatvam

Samatvam, a womenswear brand that blends age-old craftsmanship with modern ...

Sarah Denise Cordery, Sarah Denise Studio

Sarah Denise Cordery
Sarah Denise Studio

Manchester, England-based Sarah Denise Studio provides relevant fashion...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

Leave your Comments


May 2021

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.


Advanced Search