Ad Hoc, the loss-making young fashion division owned by Hong Kong fashion retailer Joyce Boutique Holdings Ltd is being reviewed to "stop it from dragging down the performance of the entire group."

Speaking at the company's annual general meeting, managing director Adrienne Ma said the company was considering "drastic changes" within the division, and could even pull out of this competitive market sector.

The Ad Hoc division, which was set up in 1999, recorded a net loss of HK$24 million in the 15 months to March 31. The group as a whole reported a net profit of HK$7.20 million in the same period, compared with a loss of HK$12.5 million in the previous nine months to December 31, 1999.

Joyce Boutique has been struggling to make up for revenues lost when its Armani franchise was discontinued in January. In the 15 months to March, the Armani franchise accounted for about one-third of total revenue and contributed HK$35.6 million to the operating profit.

Ma said the company would try to recoup this income by growing existing brands and purchasing new brands. It is also studying the possibility of entering the China market.