Crocodile Garments wary of double whammy
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Chinese apparel retailer Crocodile Garments has warned investors it expects its annual results to “deteriorate greatly” from last year due to a double whammy.
On the one hand, there has been a decrease in gains from the revaluation of its investment properties, while on the other retail sales are down due to falling consumer confidence and Hong Kong protests.
The company has warned that consumers in Hong Kong, where it is listed, and other markets, are spending less due to the global economic downturn and “social chaos”, an apparent reference to the ongoing protests in Hong Kong.
Last year the company reported a profit attributable to shareholders of HK$162.5 million.
“If the negative impact of existing social chaos becomes seismic, results of the garment business are possibly foreseen to worsen,” the company said in a stock exchange filing.
Questions & Answers
Q.What two main factors are causing Crocodile Garments to expect a significant decline in its annual results?
What two main factors are causing Crocodile Garments to expect a significant decline in its annual results?
The company anticipates deterioration due to a decrease in revaluation gains from investment properties and a decline in retail sales. This drop in sales is attributed to falling consumer confidence and the ongoing protests in Hong Kong.
Q.Which specific events are impacting consumer spending according to Crocodile Garments?
Which specific events are impacting consumer spending according to Crocodile Garments?
The company states that consumers are spending less due to the global economic downturn and what it terms 'social chaos'. This appears to be a direct reference to the ongoing protests in Hong Kong.
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