Giordano’s revenue slide accelerates on weakness in Mainland China

Clothing retailer Giordano International Ltd. (0709.HK) on Thursday reported its revenue fell 8.3% year-on-year in the third quarter to HK$820 million ($105 million), accelerating from a 1% decline in the first half of the year, as its online and Greater China sales both logged double-digit declines.

The company’s Greater China sales fell 13.5% during the quarter to HK$352 million, accounting for about 43% of its revenue. Southeast Asia and Australia, its second-largest revenue contributor, also fell 6.5% during the quarter to HK$302 million. The company’s only region to grow was the Middle East, which rose 1.2% to HK$166 million.

By channel, the company’s online sales plunged 30.6% year-on-year during the third quarter to HK$93 million, while offline sales fell 4.2% to HK$613 million.

The company blamed the Greater China weakness partly on an overhaul of its Mainland China operations, whose store count dropped by 53 outlets by the end of the third quarter compared with a year earlier. Giordano said its e-commerce business in Mainland China is currently undergoing a “tactical transition” to improve its product mix, which temporarily weighed on sales during the quarter.

The company did not provide any profit data for the third quarter. It previously reported its profit fell 10.7% to HK$108 million in the first half of this year from HK$121 million a year earlier.

Giordano’s shares were unchanged on Friday, closing at HK$1.265. The stock is down 11.5% this year.

By Doug Young

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