Daphne International sales slump

Hong Kong-listed shoe retailer Daphne International has reported a third quarter same store sales slump of 19.7 per cent as it continues to cull its store network.

As earlier reported, Daphne issued a profit warning in July after reporting a fall in same store sales of 16.9 per cent in the first half of 2015, and by 17.7 per cent in the second quarter.

In the first six months of the year, Daphne closed 181 stores – 117 directly-managed and 64 franchised stores, the majority in the second quarter. But it still has 6221 points of sale.

Daphne operates the Daphne and Shoebox retail brands in Mainland China.

During the third quarter, same-store sales of the group’s core brands business recorded a decline of 19.7 per cent year on year, but the company explained that was from a high base effect of 6.3 per cent growth during the same period last year.

Overall, the same store sales decline of its core brands for the first three quarters of 2015 was 17.9 per cent.

“The same-store sales decline was more driven by the lower average selling price, although both ASP and sales volume recorded a decrease,” the company disclosed.

“The group continued the consolidation of the sales network, with a net closure of 219 points of sale during the third quarter (a reduction of 191 directly-managed stores and 28 franchised stores), and therefore had a total of 6002 POS under its core brands business as at September 30.”

The one bright spot was an undefined growth in sales in its eCommerce sales during the third quarter.