• FY net earnings fall 70.1%
  • Gross margin at 39.5%
  • Sales slump 27.6%

361 Degrees International saw its earnings plummet in fiscal 2013 as a result of the slowing economy, weak consumer sentiment, and the threat of e-commerce to brick-and-mortar operations.

The Hong Kong sportswear maker saw earnings fall 70.1% to CNY211.3m (US$34.2m) in the 12 month period from CNY707.2m a year earlier.

Gross margin shed 0.3 percentage points to 39.5%, primarily due to two reductions in wholesale pricing to distributors during the year.

On the back of a weak order book from trade fairs held earlier in the year, the group's revenue slumped by 27.6% to close the year at CNY3.58bn.

"In a defining year under the new Chinese leadership, the sportswear industry continued to struggle throughout 2013, although there were increasing signs of a very modest recovery," the company said. "As inventories declined in the face of lower new supplies by the leading brands, retailers were able to hold discounting at a more reasonable level.

"However, with a slowing economy, store traffic remained rather weak as consumers were confronted with an ever-increasing choice of brands. E-commerce further posed an ever-increasing threat to the traditional brick-and-mortar stores in the industry, although it primarily now serves as a clearance channel."

Expert analysis

World Textile and Apparel Trade and Production Trends: China, Hong Kong, Japan, South Korea and Taiwan, 2013 edition

World Textile and Apparel Trade and Production Trends: China, Hong Kong, Japan, South Korea and Taiwan, 2013 edition

This latest report in our flagship series contains 29 pages of statistical data, information and insight into the textile and apparel industries in China, Hong Kong, Japan, South Korea and Taiwan. The...read more