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GIORDANO INTERNATIONAL LIMITED
(Incorporated in Bermuda with limited liability)
(Stock Code: 709)
UNAUDITED OPERATIONS UPDATE FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2018
The board of directors (the "Board") of Giordano International Limited (the "Company") presents the unaudited operations update of the Company and its subsidiaries (the "Group") for the three months ended September 30, 2018. This announcement is made pursuant to Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) and rule 13.09 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.
Shareholders and potential shareholders of the Company are advised to exercise caution when dealing in the shares of the Company.
SUMMARY OF OPERATIONS UPDATE
Table 1: Overview of Group Sales
Three months ended Sep 30 | Nine months ended Sep 30 |
(In HK$ million) | 2017 |
The rest of Asia Pacific | 1,060 |
Mainland China | 886 |
Hong Kong and Macau | 697 |
Taiwan | 450 |
The Middle East | 505 |
Wholesale sales to overseas franchisees | 260 |
Group sales1 | 3,858 |
Global brand sales2 | 4,978 |
Group comparable store sales ("CSS") growth3 | 3.9% |
Inventories at period end | 527 |
Table 2: Group sales by channel | |
Three months ended Sep 30 | Nine months ended Sep 30 |
(In HK$ million) | 2017 |
Physical stores | 3,121 |
E-business | 180 |
Retail sales | 3,301 |
Wholesale sales to franchisees | 557 |
Group sales | 3,858 |
2018 | 2017 | 2018 |
355 251 226 142 134 68 | 355 281 224 146 153 81 | 1,193 932 703 498 469 241 |
1,176 | 1,240 | 4,036 |
1,481 | 1,519 | 5,012 |
(2.8%) | 2.3% | 2.9% |
525 |
2018 | 2017 | 2018 |
959 50 | 1,000 47 | 3,267 213 |
1,009 167 | 1,047 193 | 3,480 556 |
1,176 | 1,240 | 4,036 |
During the quarter, group sales decreased by 5.2%, or 6.9% if translated at constant exchange rates. Group CSS was down by 2.8%. We saw a sharp decline in sales as a result of dampened consumer confidence since June throughout the Asia Pacific region. Core Giordano lines constituted 84.6% of total brand sales. Our premium womenswear brand, Giordano Ladies, posted a CSS growth of 3.3%.
Table 3: Store portfolio
Retail and Distribution
Mainland China
Franchised stores
Directly operated stores ("DOS")
The rest of Asia Pacific
Taiwan
The Middle East
Franchised stores
DOS
Hong Kong and Macau Overseas franchisees
Total
Table 4: System inventories
(In HK$ million)
Inventories held by the Group
Inventories held by 48.5% South Korea joint venture Inventories held by franchises in Mainland China Finished goods at suppliers (net yet shipped)
Total system inventories
By Order of the Board
LAU Kwok Kuen, Peter Chairman and Chief Executive
Hong Kong, October 19, 2018
As at the date of this announcement, the Board comprises three executive directors; namely, Dr. LAU Kwok Kuen, Peter (Chairman and Chief Executive), Dr. CHAN Ka Wai and Mr. Mark Alan LOYND; two non-executive directors; namely, Dr. CHENG Chi Kong and Mr. CHAN Sai Cheong; and three independent non-executive directors; namely, Dr. Barry John BUTTIFANT, Mr. KWONG Ki Chi and Professor WONG Yuk (alias, HUANG Xu).
1 Group sales refer to consolidated sales and include retail sales from DOS and wholesale sales to all overseas/ non-consolidated franchisees.
2 Global brand sales are at 2018 exchange rates, and are greater than Group sales to include the total of Giordano retail sales, in DOS, franchised stores and stores operated by a joint venture.
3 Group CSS are total Giordano brand sales of consolidated subsidiaries, at constant exchange rates, from existing DOS and franchised stores that have been fully operating in the same prior period.