• Q1 earnings decline by 38.7%
  • Gross margin narrows to 27.9%
  • Sales fall 47.3%

Men's wear business China Xiniya Fashion said it is focused on initiatives to improve performance after it revealed a decline in earning, sales and margins in its first-quarter.

Net profit declined by 38.7% to CNY16.3m (US$2.6m) in the three months to the end of March. This compared to CNY26.6m in the first quarter of 2014.

Gross margin narrowed to 27.9% from 29.6% a year earlier, primarily due to an increase in research and development expenses.

Revenue fell 47.3% to CNY107.9m, as compared to CNY204.6m in the same period of the prior year.

CEO Qiming Xu, said: "As part of our effort to stabilise our retail network, we are now focusing on the short term challenges of preserving cash, implementing cost cutting initiatives and installing an ERP system to effectively monitor our distribution channels. With these short-term initiatives in place and our substantial capital position, we are well prepared for the consolidation of the menswear industry."