Fortress Dragon Lost Half A Year, Hongkong Market, Retail Predicament Is Uncertain.

Hongkong for

The attractiveness of the brand is weakening, and Hongkong has no longer played a key role in brand building in the Chinese market.

Recently,

The International released half year results as of December 31, 2017. The group achieved a revenue of HK $974 million, a year-on-year decrease of 4.68%, a net profit loss of HK $11 million 822 thousand, and a net profit of HK $16 million 904 thousand in the same period last year.

In the earnings report,

The reason for the loss is that the continued weakening of the clothing retail market, but the fierce competition, coupled with the fluctuation of foreign exchange, has led to a decline in profits related to retail business and export franchise business in Hongkong and Macao.

In addition, due to the implementation of the "one Monday trip" policy in mainland China, coupled with the change of passenger consumption pattern (more in-depth tourism instead of retail shopping), this unfavorable factor led to a fall in store consumption, thus affecting the retail sales of Hongkong and Macao, which accounted for more than 50% of the group's total revenue.

According to the region:

Hongkong and Macao, China

Including retail and export franchising business, the total revenue was HK $646 million, down 9%, and retail business's same store sales fell 4%.

Mainland market revenue increased 13% to HK $171 million, while same store sales increased by 9%.

Total revenue in Taiwan, China increased by 10% to HK $87 million, while same store sales increased by 5%.

According to the latest data up to February 2018, there are 940 shops in burshlung, including 282 Direct stores and 658 franchised stores.

The largest clothing retail group in Hongkong and Macao.

Performance continued to decline

Dragon is Hongkong's most famous leisure style rich in European and American style.

One of the brand names, Bossini, has been renowned for its simplicity, fluency, fashion and leisure comfort.

Bosilong opened the first specialized store in Hongkong in 1987 by the "knitting king" in Hongkong. In 1993, The Stock Exchange of HongKong Limited listed on the market. After about 30 rapid development, it has established a huge global operation platform and distribution network, and has successfully expanded its business to about thirty countries and regions in the world, with Hongkong, mainland China, Taiwan, Singapore and Malaysia as the five core markets.

Burshalon was once the largest clothing retail group in Hongkong and Macao. Since the beginning of 2016, because of the intense competition in the mainland market and the weakness of Hongkong's tourism and retail market, burshalon has released several surplus police. The group's net profit in 2014 fiscal year, 2015 fiscal year and 2016 fiscal year has plummeted year by year, and recorded 127 million Hong Kong dollars, 115 million Hong Kong dollars and 25 million Hong Kong dollars respectively.

In fiscal year 2017, sales of burshlung decreased by 12.9% to HK $2 billion 20 million, and net profit fell 98% to HK $4 million 886 thousand.

Unqualified quality inspection of burlung

There are problems with the quality of the garments in burshelon. Since 2007, there have been at least 4 quality checks detected by the quality inspection department.

The official website of Guangdong provincial quality and Technical Supervision Bureau released the "double random" special inspection and inspection results of women's clothing products in Guangdong province in 2017. The results showed that the quality inspection of bursworth was not qualified, and the unqualified items involved 8 items, including fiber composition and content, pH value, joint performance, color fastness to perspiration, color fastness to water, color fastness to rubbing, fastness to light and color fastness to dry cleaning.

The collective decline of "Hong Kong" clothing brand

Baleno is on sale

Under the fierce impact of ZARA, H&M and other fast fashion and electricity providers, some Hongkong clothing brands are striving for survival in the fierce market gap.

In 2016, the Baleno brand, which had been crossed after 80, was sold by the parent company Hongkong de Yongjia group at a price of 250 million yuan.

Other parts of Hongkong's brand life is also not easy.

Esprit substantial loss, a significant closing shop

Entering the mainland market in 1992, it was ten years earlier than UNIQLO, but it was also against the fast fashion of foreign countries. Its income continued to decline and fell to a loss.

Esprit's parent company announced that its net loss in the first half of the 2018 fiscal year will be between 950 million and HK $980 million, compared with HK $61 million in the same period last year.

Esprit's business in Asia has also declined significantly.

According to the quarterly results released in September last year, the Asia Pacific region accounted for only 10%, far below Europe.

The company has closed the flagship store in Tsim Sha Tsui, Hongkong. The company plans to close its business in Australia and New Zealand by the end of this year, and focus on developing the Asian market.

Brand analysis said that the loss was mainly caused by the sharp decline in the performance of Esprit in mainland China in recent years and its influence on retail distribution channels.

I.T Hongkong store sales continue to decline, and gradually dominated by the mainland market.

Due to the continued downturn in retail sales in Hongkong, I.T in Hongkong has a large number of stores.

In the first 9 months of this fiscal year, the I.T and Hongkong revenue decreased by 3.9% over the first two months of this fiscal year, while the mainland grew by 1.1% over the same period last year, while Japan and the United States increased by 30.7% over the same period last year.

In the 2016/2017 fiscal year, although its overall performance is on the rise, it is mainly due to the strong rebound in the mainland and Japanese markets. Hongkong still has negative growth. During the period, the total retail revenue fell by 6.3% to HK $3 billion 243 million, and the sales area in Hongkong also decreased by 7.7%.

Meanwhile, Hongkong's revenue contribution also dropped from 46.3% in the 2015/2016 fiscal year to 41% in the current period.

Is Hongkong's retail environment dilemma temporary or lasting?

Under such circumstances, high rent, loss of tourists, weak consumption power, impact of electric business, choice of market and brand increase, insufficient domestic demand, and so on, there are many complicated factors behind Hongkong's retail industry, which is mainly supported by mainland tourists.

The data from the Hongkong Statistics Bureau also give the same answer.

In 2017, Hongkong's retail industry recorded growth for the first time since 2014. At this point, it has experienced a decline for more than 20 months.

In this round of cruel reshuffle in fashion industry, the old fashions are facing the trend of closing stores, while the other side is fast.

It has grabbed half of the fashion industry.

Under the rule of survival of the fittest, Hongkong's attractiveness to fashion brands is weakening. Hongkong has no longer played a key role in brand building in the Chinese market.

It is becoming increasingly difficult for Hongkong to become the preferred shopping destination for mainland tourists.

It can be said that the prospect of Hongkong's retail industry is still very uncertain.

How to adjust strategies according to market conditions, how to deal with new environment and new market changes, and how to break through the stalemate? When struggling to resist recession, the business that tourists rely on will be difficult to continue. We must begin to re integrate the brand business and rely on stronger operational capabilities to make the "geographical predicament" end as soon as possible.