Daphne Lost HK $493 Million In The First Half, Closing 394 Direct Outlets

In August 28th,

International releases interim results for 2018.

For the 6 months ended June 30, 2018,

The turnover was HK $2 billion 259 million, a decrease of 17.33% compared with the same period last year, and the share loss of shareholders was HK $493 million, an increase of 135.19% compared with the same period last year. The basic loss per share was 29.9 Hong Kong cents, not paying dividends.

Daphne's losses in the first half of the year increased sharply, and the share loss of shareholders increased from HK $209 million 500 thousand in the first half of 2017 to HK $492 million 600 thousand.

This is mainly due to an annual reduction of 25.9% (from 4570 in December 31, 2017 to 3386 in June 30, 2018) and the decline in sales of core brand businesses in the same store.

In the first half of this year, the group suffered a loss of HK $489 million 700 thousand, a loss of HK $205 million 200 thousand in the same period last year, a 29% decline in gross profit and a decrease in gross profit from HK $1 billion 522 million to HK $1 billion 80 million 200 thousand in the first half of the year.

770 base points to 47.8%.

As of June 30, 2018, in the first half of 2018, 416 core brand sales outlets were closed, of which 294 were closed in the two quarter, including 287 Direct stores and 7 franchisees.

As of June 30, 2018, the core brand business of Daphne group had 3173 sales outlets, compared with 4292 in the same period last year, a decrease of 1119.

The loss of core brand business expanded to HK $481 million 900 thousand.

The core brand business of the group refers to the sale of its own brand "Daphne" and "shoe cabinet" in mainland China.

Retail business of products and accessories.

In the first half of this year, the group's core brand business closed down 416 sales outlets, including 394 direct outlets and 22 franchised stores. The number of sales points decreased by 11.6% compared with December 31, 2017.

As of June 30, 2018, there were 2909 core brand business outlets and 264 franchises, a total of 3173.

Affected by the weak economic environment and fierce market competition, as of the first half of 2018, the core brand business and same store sales fell by 9.1% year-on-year.

The decrease in the number of sales points and the poor sales performance of the same store resulted in an annual decrease in the core brand business turnover of 15.6% to HK $2 billion 80 million, compared with HK $2 billion 465 million in the same period in 2017.

During the review period, the external customer revenue of the division accounted for about 86% of the group's total turnover.

The decline in sales and a sharp decline in Maori have caused enormous pressure on operating profit margins.

As of the first half of 2018, the loss of core brand business expanded to HK $4.819, compared with HK $191 million in the same period in 2017.

Sales of other brand businesses reduced to 213.

Other brand businesses of the group include its e-commerce business and high-end brand business (including the group's own brand and exclusive distribution rights).

The other brand business segments accounted for about 14% of the group's total turnover during the review period.

During the review period, the sales point decreased by 23.4% from 278 to 213 in the same period last year, resulting in a decrease in the turnover of other brand business segments to HK $3.13, compared with HK $381 million in 2017.

As of the first half of 2018, other brand businesses recorded a loss of HK $5 million 700 thousand and a profit of HK $4 million 100 thousand in the same period in 2017.

Cross border cooperation series will be launched in the three quarter

To strengthen its upgraded brand image, the group will continue to optimize its store network and create more new image shops, and will also speed up shop renovation projects to enhance the upgraded brand image.

In the third quarter of 2018, the group will launch the next important cross-border cooperation series, and plan a series of integrated marketing activities to help online and offline channels and attract more consumers.

Product upgrading is still one of the key points of group business pformation to meet different needs of customers.

In order to further enhance the contribution of electricity providers to group sales, the group plans to access more store systems.

To attract more customers for its offline sales channels.