In a challenging market, intimate-wear enterprise Cosmo Lady (China) Holdings had a 6 per cent dip in revenue to about RMB2.07 billion (US$310.9 million) for its first half.
Announcing its interim results, the company says the decline was mainly because of loss-making retail stores being closed, coupled with weak sales of sleepwear and loungewear.
Gross profit fell from RMB1.05 billion for the first half last year to RMB937.1 million, with gross profit margin easing to about 45.1 per cent from 47.7 per cent.
Sales of bras and underpants returned to growth for the six months, following last year’s decline. Adjustment is still in progress for sleepwear, loungewear and thermal clothes.
Cosmo Lady says its group profit of about RMB144.8 million, while lower than the RMB174 million for the same period last year, was a significant improvement over the RMB67.9 million for last year’s second half.
“During the first half of this year, Cosmo Lady’s business was consistently challenged by economic and industry uncertainties,” says chairman/executive director/CEO Zheng Yaonan.
Stores closed
A “large number” of loss-making retail stores, mainly department store concessions and high street locations, were closed. At the end of June, the group’s distribution network comprised 7307 outlets, of which 1295 were self-managed retail stores and 6012 were franchised stores. Meanwhile, the group further developed its e-commerce business, continuously boosting sales and has been expanding partnerships. In May, it signed a co-operation agreement in Japan to distribute Kimuratan Corporation apparel for infants and children in Mainland China.
Cosmo Lady also issued new shares to a wholly owned subsidiary of Fosun International, raising gross proceeds of HK$600 million (US$76.6 million). The two parties entered into a strategic co-operation agreement to explore development possibilities in the intimate-wear industry in China.
Also, the group has also started developing the Indonesian market with a business partner.
It has also engaged Rowland Berger Strategy Consultants (Shanghai) for help in preparing and implementing a five-year development plan
During the rest of this year, Cosmo Lady will be working with partners to develop the markets of Thailand, Vietnam and other developing countries in Southeast Asia, as well as opening discount retail stores in third- and fourth-tier regions in China.