Fashion Menswear CABBEEN Also Can Not Escape The Weakness Of The Retail Market.

domestic

CABBEEN (02030) is also unable to escape the weakness of the retail market, and its performance in the first half of the year is greatly reduced.

To increase sales, CABBEEN increased retail discount and promotional activities.

However, its

The sales rate is still lower than expected.

In its interim results released in August 1st, CABBEEN said it expected the mainland's weak economic environment and low consumer sentiment to continue to affect its earnings and profit margins in the second half of the year.

Profits will be reduced by 30.9% and dividends will be paid.

Reporters learned that in the first half of, CABBEEN recorded a profit of 536 million yuan (RMB, the same below), a decrease of 4.5% compared to the same period last year, and recorded a profit of 143 million yuan, a decrease of 30.9% compared with the same period last year. The profit of the company's equity shareholders was 102 million yuan, a decrease of 31.5% over the same period last year, and the basic and diluted earnings per share were reduced to 14.37 points and 14.3 points respectively, representing a decrease of about 31% over the same period last year.

CABBEEN said sales revenue declined in the first half of the year as a result of falling sales and sales rebates and increased provision for rebates.

The decrease in net profit is due to a decrease in sales revenue, an increase in inventory provision and sales returns, a decrease in government subsidy income and an increase in operating expenses.

Reporters learned that the board of directors of CABBEEN decided to declare the interim dividend in 2016 to shareholders who were listed on the register of shareholders in August 16, 2016, specifically for the 6.8 ordinary Hong Kong cents per share, which will be paid before August 31st.

Considering the weakness of the mainland's economic environment and the increasing trend of online shopping, in the first half of, the company closed 47 stores with poor performance and slowed down the pace of new retail outlets.

As of June 30, 2016, CABBEEN had 1012 retail outlets, compared with 1059 in December 31, 2015.

Compared with the performance of the entity store, CABBEEN's "online store" performed better in the first half of the year.

CABBEEN has set up online shop products on e-commerce platforms, including T-mall and JD.com, and its official website.

In the first half of the year, its online platform retail revenue increased by more than 73% compared with the same period in 2015.

Reporters learned that CABBEEN's e-commerce revenue includes the wholesale proceeds from selling products to independent online distributors, and the three parts of the retail revenue and service fee income from selling products online.

In the first half of the year, the revenue generated by CABBEEN's sales through e-commerce platform was 20 million 300 thousand yuan and 12 million 300 thousand yuan respectively.

In addition to the rise of e-commerce, CABBEEN is gradually pforming its retail business in wholesale mode to the sales agency mode.

As of June 30, 2016, a total of 422 retail outlets had been pformed into a consignment business, accounting for about 41.7% of the total number of CABBEEN retail outlets.

The shops that sell on commission basis include most of CABBEEN's retail outlets in Guangdong, Guangxi, Hainan, Fujian, Anhui, Jiangsu, Zhejiang, Guizhou and Shaanxi provinces.

CABBEEN believes that consignment business will help improve operational efficiency, and attract more distributors to expand its retail network in the local market.

Reporters learned that in the first half of 2015, CABBEEN's average stock turnover days were 185 days, compared with 63 days in the same period.

The stock balance as at June 30, 2016 was about 277 million yuan, compared with about 2.67 billion in December 31, 2015.

The increase in inventory balances and turnover days in CABBEEN was mainly due to the increase in the number of retail outlets operated by self operated retail outlets and the sale of retail outlets, and the weak retail sales performance.

Prior to the release of its interim results, CABBEEN had issued a profit warning that sales in the first half of the year decreased, sales returned and inventories increased and sales and distribution costs increased, reflecting the impact of the group's weakness in the domestic retail market since 2016.

In its interim report, CABBEEN said it expects its earnings and profit margins to continue to be affected by the above factors in the second half of 2016.

However, although CABBEEN believes that the domestic economy and consumer sentiment will not have any immediate and significant improvement in the short term, in the long run, the growing domestic consumer spending still brings tremendous growth opportunities to its performance.

In the second half of 2016, CABBEEN will take a more cautious approach to assess inefficient shops and slow down the pace of opening new retail stores.

In the future, CABBEEN will not hold quarterly orders, and will receive orders from three to four batches per quarter, and purchase orders from suppliers.

In addition, as mobile apps change customer consumption patterns, CABBEEN will make additional investments in the development of social media platforms and enhance its ERP system in line with online and offline distribution channels.