Giordano post a “quite okay” result
Third-quarter sales for apparel retailer Giordano International have been edging ahead in most markets, an exception being South Korea, a 48.5 per cent JV with an independent management team.
While e-commerce sales jumped by 17.6 per cent in Mainland China, overall sales growth reached only 2.6 per cent, with a decrease of 2.5 per cent in directly run stores. The company closed 32 non-performing outlets.
Comparative own-store sales grew by 8.4 per cent, with an 0.5-point decline in gross margin because of a change in channel mix as the contribution from the lower-margin e-business.
In Hong Kong and Macau, sales for the three months to the end of September grew by 3.2 per cent.
Gross margin fell 1.6 points as a result of sales promotions to counter an unusually hot and rainy summer and late autumn. These promotions pushed up sales volume by 13.8 per cent while reducing the average selling price by 9.2 per cent.
Comparative-store gross profit rebounded in Taiwan, where sales and gross margin rose by 2.9 per cent and 1.1 points respectively. Giordano says the improvements are sustainable for the rest of the year. Gross margin also benefited from lower product costs on a strong local currency.
In the rest of Asia Pacific sales increased by 5.4 per cent at constant exchange rates. The acquisition of Vietnam business in July contributed to 5.1 per cent of sales in the region.
Unusually strong sales in Thailand last year resulted in an unfavorable year-on-year comparison for the quarter.
“In Hong Kong and Macau, sales for the three months to the end of September grew by 3.2 per cent.”
Ramadan effect
Indonesia sales rose by 3.5 per cent as a result of shop expansion. While comp-store sales fell by 4.1 per cent and gross profit eased 1.8 per cent as a result of the different timing of Ramadan, comp-store sales from June to September this year increased by 9.7 per cent against the same period last year.
Early Ramadan also affected sales in Malaysia, which grew by 4.3 per cent. Comp-store sales rose by 2.6 per cent while gross profit eased 1.4 per cent. Comp-store sales for June to September strengthened 20.4 per cent compared with the same four-month period last year.
Both comp-store sales and gross profit dropped in Thailand, by 4.9 and 6.3 per cent respectively, against an unusually high base in the same quarter last year.
Sales fell 3.6 per cent in South Korea while gross margin improved by 0.7 points. The decline was mainly because of summer clearance sales and unusually hot weather in September hitting fall/winter merchandise sales.
Overall group sales rose by 3.6 per cent to HK$1.2 billion (US$153.8 million). Group gross profit increased by 3 per cent on improved sales, partially offset by a 0.3-point decline in gross margin.
Giordano attributes this partly to the change in channel mix and selective promotional activities. Group comparable-store sales and comparable-store gross profit for the quarter grew by 2.3 and 1.5 per cent respectively.
At the end of September, the group’s distribution network comprised 2370 stores in more than 30 countries, about half of these being standalone stores. Most stores were in Greater China, South Korea and Southeast Asia.
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