Weaker sales and margins hurt Bosideng H1
- H1 profit falls 22.5% to CNY252.7m
- Revenue up 1.4% to CNY2.85bn
- Down apparel sales fall 19.2% to CNY1.42bn
Down apparel sales dropped 19.2% during the first six months of the year
Lower sales of its core down apparel products combined with weaker margins resulted in a double-digit profit decline for Bosideng International Holdings Ltd during the first half.
China's largest down apparel company said profit attributable to shareholders amounted to CNY252.7m (US$41.1m) for the six months ending 30 September, compared to CNY326m.
Revenue increased 1.4% to CNY2.85bn from CNY2.81bn a year ago, thanks to a 54.8% jump in revenue from the OEM management business to CNY1.01bn.
Down apparel sales, however, declined 19.2% to CNY1.42bn. Bosideng noted that it mostly sold old off-season products during the period, which is a low season for down apparel sales.
Sales volume of branded down apparel fell 8.2% to 6m units, primarily due to efforts to control inventory and production volume.
Meanwhile, gross margin was down 2 percentage points to 47.4%. The group attributed this to a 5.2 percentage points decline in non-down apparel gross margin, due to the reduction of Bosideng Menswear inventory through various promotion platforms, and a 2.9 percentage points fall in gross margin of OEM management business because of the change in order structure.
Bosideng chairman Gao Dekang said although China's apparel industry continues to face challenges such as over-capacity, inventory backlog and excessive expansion of retail networks, companies have already adjusted their businesses as a result.
"Bosideng will strive to stay up to date on the market trends and thus enhance the competitiveness to maintain a sustainable and healthy growth for the long term."
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