Hong Kong casual wear chain Giordano International closed 163 stores in mainland China in the first quarter of 2013 but the clothing retailer said it will open shops in markets with strong growth potential, such as in South East Asia and Saudi Arabia and new markets like Japan, South Africa and South America.
Giordano said on Tuesday sales for the quarter ended on 31 March 2013 increased by 6 percent to HKD1.51 billion (USD194.5 million) from HKD1.43b in the same period last year. Brand sales and comparable store sales declined 2 percent.
Weakening consumer demand has continued to impact its performance in Mainland China and Taiwan as sales dropped 5 and 15 percent respectively in the first quarter. Sales in Hong Kong advanced 4 percent while other Asia-Pacific markets jumped 12 percent.
Gross profit jumped 11 percent from HKD816 million to HKD905m during the period.
"Mainland China markets remained weak during the Chinese New Year period. Along with our franchisee partners we continue to reshape our footprint in Mainland China, closing unprofitable stores and focusing on enhancing the quality of our operations where we open stores," said Lau Kwok Kuen, Chairman and CEO of Giordano.
During the first quarter, the retailer closed 163 stores in Mainland China which brings the total number of remaining Giordano locations to 1,207, including 516 self-operated stores and 691 franchised stores.
Giordano looks at Mainland China as the key market for the group’s growth and plans to introduce new store formats this year, particularly aimed at women. It has also developed new products particularly for this market, according to Lau.
"Outside Mainland China we will continue to develop our operations across a wide geographic range, ensuring that the strong growth that we have in many of these markets will continue. We will open shops in markets with strong growth potential, such as in South East Asia and Saudi Arabia and new markets like Japan, South Africa and South America. In mature markets such as Hong Kong, Taiwan and Singapore, we will invest in programs to strengthen the brand. These will be marketing initiatives, such as those developed in Hong Kong and Taiwan and store development projects. Later this year we will open a large store in Suntec City in Singapore that will be a showcase for the Giordano brand," said Lau.