Despite reporting a 3.6% rise in third quarter turnover, Hong Kong based casual clothing retailer Giordano International Ltd today (14 November) said it has suspended all new store projects and hiring outside mainland China in an attempt to weather the economic downturn.

The decision came after a strong increase in mainland China sales failed to offset slumping demand elsewhere in Asia.

The company blamed "the global financial tsunami" for year-on-year third quarter sales declines in Hong Kong, Taiwan and Singapore, which were down by 9.9%, 11.0% and 3.7% respectively.

Bucking this trend was China, where turnover jumped 25.3% from a year earlier in the three months to 30 September.

It added 22 stores, including new flagship stores in Guangzhou, Hangzhou, Wuhan and Chengdu, in the third quarter to bring its network in China to 881 outlets at the end of September.

"We are taking the prospect of an acute and protracted economic downturn extremely seriously," said chairman Peter Lau.

He said the firm had already exited from six under-performing locations in Hong Kong and eleven in Taiwan in the first nine months of 2008, and "will continue to closely monitor each market's performance and make any necessary adjustments as circumstances require."

The Group added that in spite of record warm temperatures and an increasingly cloudy economic outlook, it still achieved a high single digit year-on-year turnover increase in China in October.

But sales in Hong Kong and Taiwan both experienced double digit declines as consumer confidence rapidly waned.

For the nine months to 30 September, turnover rose 9.0%, and gross margin was 51.3%, up 120 basis points over the same period last year. China sales rose 31.2% in the nine months and gross margin rose by 410 basis points.

The company added 15 outlets during the third quarter, taking its global network to 1,949 stores.