• Q3 profit plummets 89.4% to CNY6m (US$984.7m) 
  • Revenues fall 6.7% to CNY389.8m from CNY417.9m 
  • Gross margin slips to 29.7% from 34.5%

Men's wear business China Xiniya Fashion has seen its third-quarter profit slump on the back of lower sales and higher rebates given to its distributors and retailers.

The company today (20 November) attributed the gross margin decline to lower prices on its 2013 autumn/winter collections, as well as increased rebates offered to distributors and authorised retailers.

"Our business continued to face significant challenges during the third quarter due to the continued softness of the Chinese economy and the aggressive discounting done by other menswear brands, which has reduced the overall profitability of the industry as a whole," said chairman and CEO Qiming Xu.

"Sentiment among our distributors and authorised retailers has improved over the quarter, thanks in part to a new credit initiative that we have implemented that complements and further supports long and short-term initiatives already in place."

The new initiative, Xu said, extends credit terms by providing an extra incentive to ensure distributors open more retail outlets.

"With the support of our new credit initiative and the exciting collection we exhibited in September 2013, I am certain that our efforts will pay off."