Menswear manufacturer and retailer China Lilang has reported a 15.5 percent increase in sales for last year to RMB3.658 billion, (US$515.78 million).
The top line was boosted by store network expansion. The company opened an average of nearly three new stores each week last year, ending it with 2815 Lilanz-branded outlets nationwide. Many stores were relocated as well, to improve the brand’s exposure to consumers. Almost 28 percent of stores are now located in shopping centers.
China Lilang said profit from operations rose by 11.1 percent to RMB980 million ($138 million) and net profit rose by 8.1 percent to RMB812 million ($114.5 million).
Wang Dong Xing, chairman and executive director of China Lilang, said the abnormally high temperatures nationwide during the fourth quarter of the year – the traditional peak season for the retail sector – added more challenges to the apparel industry. As a result, the company provided rebates to distributors as an incentive to discount slow-moving stock through clearance sales.
He said brand and product competitiveness, retail management and shop location have become increasingly important determinants of operating efficiency for the company.
Looking ahead, Wang Dong Xing said the coronavirus outbreak has hit retail sales hard and the group will consequently reduce the production of Autumn 2020 products to help stores destock Spring inventories.
Despite strong Lunar New Year sales in January, China Lilang is expecting a 40-per-cent decline in first-quarter sales with an adverse effect on full-year results.
Chairman Wang Dong Xing concluded: “The epidemic will have some impact on the retail market in the first half of the year; but we expect its impact on our business to be temporary. In mid-March, about 70 percent of Lilanz stores resumed operations. As a well-established menswear enterprise, the group believes that China Lilang has distinctive advantages in both original designs and value-for-money of its products.”