3 Years Closed Nearly 3000 Stores, Huge Losses 1 Billion 900 Million Daphne Witnessed The Great Slide Of Women's Shoes Industry

Daphne spokesperson Gianna Jun and Nicholas Tse

March 28, 2018: Taiwan capital

Group Daphne continued to maintain a huge deficit last year, with a loss of HK $734 million 200 thousand in 2017, only narrowing compared with HK $819 million 100 thousand in 2016.

With a deficit of HK $378 million 900 thousand in 2015, the group accumulated a deficit of HK $1 billion 930 million in the three years when the traditional women's shoes went down sharply.

Daphne said that 2017 was an important year for the group and initiated a number of pformation measures to meet market challenges.

However, the annual performance shows that Daphne group is hard to prevent the downward trend of decline. The group's turnover decreased by 19.9% to HK $5 billion 211 million, which was HK $6 billion 501 million 700 thousand in 2016.

The decline in sales was mainly due to a 12.4% plunge in the sales of Daphne core brands and a 21.9% decrease in net sales.

During the period, core brand turnover decreased by 20.8% to HK $4 billion 703 million 200 thousand, compared with HK $5 billion 936 million in 2016.

In 2017, Daphne's core brand closed shop 1009, from 4598 to 3589, of which the outlets closed 943 to 3303, and the franchisees reduced from 66 to 286.

In 2015 and 2016, the group had closed 805 stores and 1030 stores respectively, and the core brand sales point of the group dropped by 36% at the end of December compared with the end of 2015.

In 2017, Daphne's gross profit plunged 16.9% to HK $2 billion 753 million, which was HK $3 billion 111 million 700 thousand in 2016, and the gross profit margin was 52.8%. Instead, it increased by 190 basis points per year, mainly due to the increase in the gross profit margin of the core brand, and the operating cost decreased by 17.2% during the period.

During the reporting period,

The gross profit margin of the core brand improved by 190 basis points to 49.2%, and the average selling price was RMB 159 yuan, which is the same as that in 2016.

Daphne recorded a loss of HK $688 million 800 thousand throughout the year, narrowing by 15.9% compared to the HK $819 million 500 thousand loss in 2016.

Other brands, including love, STEP HIGHER, alsofs and ALDO, also sell the same brand in 2017.

From 18.2% to HK $733 million 500 thousand, the sales point also decreased from 302 to 247. In 2016, the business income was HK $813 million.

The development of e-commerce business also dragged down the gross profit margin of the sector by 80 basis points to 58.2%, while the branch business recorded a HK $7 million 100 thousand operating loss last year, with HK $7 million 800 thousand in 2016.

With the continuous sales slump, closing stores and discounting inventory, the inventory of Daphne at the end of fiscal year 2017 decreased by 11.8%, from HK $1 billion 414 million 500 thousand to HK $1 billion 246 million 900 thousand, and the stock cycle also decreased by 3 days to 198 days.

At the end of the fiscal year, Daphne's cash and balance of 486 million 300 thousand were cut in 2016, HK $989 million 500 thousand in 2016, short-term loans of HK $156 million 300 thousand, net cash HK $330 million, same year cut, and 2016 HK $692 million 800 thousand.

As of Wednesday's close, Daphne International Holdings Limited (0210.HK) Daphne International Holdings Ltd market value of HK $825 million, the stock price of HK $0.50.