Hong Kong-based Global Brands Group has offered an optimistic outlook for the remainder of the year, despite booking a fall in first-half earnings which it blamed on the challenging business environment and an ongoing fundamental shift in consumer behaviour.

Earnings for the six months to the end of September tumbled to US$7m from $21m a year earlier, reflecting a non-cash gain of $44m last year. Gross margin widened to 35.5% from 34.1%, due to an improving business mix in favour of higher-margin businesses and sourcing optimisation.   

Total sales in the period jumped 15% to reach $1.84bn, driven primarily by growth from existing and new licenses. The apparel and footwear company was spun off by sourcing giant Li & Fung in 2014 as a separate publicly-listed business and operates two core segments: licensed brands and controlled brands. Its brand licenses include Calvin Klein, Michael Kors, Tommy Hilfiger and Under Armour. Controlled brands include Juicy Couture and Spyder.

"Despite a challenging business environment, an ongoing fundamental shift in consumer behaviour and a rapid change in the dynamics of the retail industry, we have continued to strengthen our leadership position across all of our business verticals," said CEO Bruce Rockowitz. "We are delighted with the group's achievements during the period, which validates the resilience and flexibility of Global Brands' business model."

Looking ahead, however, Rockowitz said the company anticipates continued challenges with the macro and industry environment.

But he adds: "We are full of confidence about our prospects and expect that our growth momentum will continue. We will focus on increasing market share across all distribution channels, and continue to expand our business across Europe and Asia. All the necessary elements are in place to accelerate growth. We have the right people, a uniquely differentiated offering, a flexible business model, and we are well-positioned for the future and the changes in the industry."