Flat revenue leads to loss for Trinity
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Menswear retailer Trinity has recorded a half-year loss it attributes to subdued spending in Hong Kong, Macau and Taiwan, changing buying patterns, the renminbi depreciation and competition.
The group loss to shareholders was HK$257 million (US$32.8 million), with revenue at $862.4 million and gross profit $594.3 million, down from $606.8 million for last year’s first half.
Despite overall revenues remaining flat, CEO Jeremy Hobbins says a promising sign was growth in the number of units sold across its three wholly owned international menswear brands Cerruti 1881, Gieves & Hawkes and Kent & Curwen, as well as its licensed brand D’Urban.
“If we exclude the effect of exchange-rate differences, our same-store sales on the Chinese mainland grew by 8.1 per cent.”
While he is confident the group is well placed to take advantage of market growth in China, he says Hong Kong and Taiwan remain a challenge in the near term.
During the first half, Trinity appointed brand leaders in Asia to accelerate decision-making. These executives have profit-and-loss responsibility and oversee all key dealings in Asia including marketing, buying and selling.
Meanwhile, the group has closed its Hong Kong factory, with Li & Fung agreeing to take responsibility for the group’s sourcing activities. This partnership, launched in June, lowers headcount and is expected to result in cost savings.
Stores closed
“If we exclude the effect of exchange-rate differences, our same-store sales on the Chinese mainland grew by 8.1 per cent.”
Trinity says other cost-saving measures include continuing rationalisation of non-performing stores. Several loss-making stores across all brands have closed.
Following the success of the Kent & Curwen David Beckham capsule collection, the full collection is being launched in all the group’s markets. To introduce the brand, Kent & Curwen pop-up stores were opened in China as well as in Taiwan. The brand says its relationship with Beckham is a key component in its strategy to meet the increased demand for casualwear.
In response to increased demand for personalisation, the Gieves & Hawkes private tailoring service has been rolled out across China and introduced at the Mandarin Oriental store in Hong Kong.
Meanwhile, with Cerruti 1881 celebrating its 50th anniversary this year, an exclusive collection will be released. A new store concept is also being rolled out across Greater China.
It is also the 20th anniversary of the D’Urban Monsoon collection, developed by the Japanese suit brand for hot and humid climates. To mark the occasion, the collection will be offered all year round.
Trinity says its e-commerce performance has been encouraging with a doubling of revenue for the first half. Expansion is being considered for its presence on the retail platforms Farfetch, Mr Porter and Tmall.
Questions & Answers
Q.What factors did Trinity attribute its half-year loss to?
What factors did Trinity attribute its half-year loss to?
Trinity attributed its half-year loss to subdued spending in Hong Kong, Macau and Taiwan, changing buying patterns, the renminbi depreciation and competition. The group recorded a loss of HK$257 million for the period.
Q.How is Trinity addressing the challenges in its business operations?
How is Trinity addressing the challenges in its business operations?
Trinity has appointed brand leaders in Asia to accelerate decision-making and closed its Hong Kong factory, with Li & Fung handling sourcing for cost savings. They are also closing non-performing stores.
Q.What initiatives are being undertaken to boost sales and brand relevance?
What initiatives are being undertaken to boost sales and brand relevance?
The full Kent & Curwen David Beckham collection is launching, and Gieves & Hawkes' private tailoring is expanding in China and Hong Kong. Cerruti 1881 is releasing an exclusive collection for its 50th anniversary.
Q.Has Trinity seen any positive developments despite the overall loss?
Has Trinity seen any positive developments despite the overall loss?
Yes, Trinity saw growth in units sold across its international menswear brands and its licensed brand D'Urban. Its e-commerce revenue doubled, and same-store sales on the Chinese mainland grew by 8.1 per cent, excluding exchange-rate differences.
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