Giordano'S Third Quarter Sales Fell 3% Year-On-Year.

By the end of September,

(00709.HK) in the third quarter, the combined sales volume decreased by 3% in the same quarter and 1 billion 197 million yuan in the same quarter, while the same store sales fell 3%.

During the period, the gross margin was reduced by 3% to 698 million yuan, and the gross profit margin increased by 0.3 percentage points to 58.3%.

The average selling price is flat, and the average product cost is reduced by 2%.

In Hong Kong and Macao

Giordano's third quarter sales fell 4% year-on-year, mainly due to the closing of expensive rents in 2015, and the third quarter stores' gross profit growth slowed to 5% over the same period last year, up 11% over the same period last year.

Giordano's performance began to decline as early as a few years ago. In 2014, Giordano's sales volume was HK $5 billion 545 million, down 5% from 2013, and net profit of HK $408 million, down 38% from the same period last year.

The mainland market declined more obviously, with a total sales volume of HK $1 billion 580 million, down 9% from the same period last year.

In 2015, Giordano's sales volume was HK $5 billion 381 million, a decrease of 3% compared with the same period last year. At the same time, there were 80 loss shops in the mainland, accounting for 21% of the total number of self operated stores, with a total loss of 18.

Giordano's mainland market in China is also the worst hit area. In order to save its performance, Giordano adopted a radical expansion strategy and launched a free join to quickly digest inventory.

According to the data, Giordano's operating income in the first half fiscal year of 2016 was HK $2 billion 532 million, a decrease of 7% compared with the same period in 2015, and the profit margin of shareholders reached HK $204 million, a decrease of 2% over the same period last year.

By the end of September, the Group operates 2388 retail networks in more than 30 countries, of which 1155 are independent stores, and the vast majority of them are located in the Greater China, South Korea, Southeast Asia and the Middle East.

It is noteworthy that the group's expansion will focus on China's three and four tier cities as well as the Southeast Asian market as its first tier city market is completely crowding out by ZARA, H&M and UNIQLO fashion.

In addition to Giordano, a group of Hongkong fashion brands, Baleno, fort lion, and crocodile shirts, which have been popular among the post-80s, have not had a brand day. They are gradually marginalized by the market, and even have to face the fate of being cheaply sold. This year, the Shanghai Baleno Kingdom Limited is sold by the parent company Hongkong de Yongjia group at a price of 250 million yuan, and Baleno is the authorized dealer in Shanghai.

The location of these brands is becoming more and more important. Now it has become a new engine for Giordano's growth. According to the data, it accounts for more than 16% of China's electricity supplier sales, and Giordano insists that it will continue to expand its market share in the future. At present, the mainland's electricity business is growing at a rate of about 20%.

Affected by weak news, Giordano shares closed down more than 3% today, at HK $3.95 per share, with a market value of HK $6 billion 200 million, and ranked forty-ninth in terms of market value, according to the 100 of the market value of domestic apparel group.