Giordano Executives Cut Collective Wages To Fight Through The Difficulties Of The Epidemic

Giordano International Ltd (hereinafter referred to as "Giordano") announced today (March 9th) that the company has taken a series of preventive measures against the epidemic, especially in mainland China, Hongkong SAR and Macao Special Administrative Region, closely monitoring the health of employees, introducing more flexible working hours and arrangements for stores, warehouses and office staff, as well as Giordano sites. Regular disinfection and sanitation management is conducted to ensure the health and safety of the company's customers and employees, and to ensure that the group can continue to operate during this difficult period.

The board of directors of Giordano believes that the epidemic will continue to affect the business market in terms of entity management and market sentiment. For this reason, chairman and chief executive Liu Guoquan voluntarily cut wages by 50%. Other executive directors and members of each senior management team in Hongkong also voluntarily reduce their salaries by 30%. About 15 from Hongkong, Macao, mainland China and other less affected areas. Team members voluntarily reduced their salaries by 10% and 20% respectively, all for 3 months, effective from March 1, 2020.

In order to control costs, Giordano also discussed with owners to seek rent reduction and reduce the rental of Giordano stores in various markets. The group will also strengthen its cost control measures, such as seeking more favorable conditions for suppliers. In conclusion, the group's cash reserves remain stable. As of June 30, 2019, group cash and bank balances (after deducting bank loans) were Ten point two six As of March 9, 2020, there was no significant change in the amount.

Giordano said that the company will redistribute resources and rapidly upgrade its e-commerce capabilities to catch up with opportunities for online shopping.

First textile network reporter noted that the problems facing Giordano are also the real challenges for the clothing brand enterprises to cope with the resumption. Recently, Tsinghua University and Peking University jointly investigated the current situation of 995 small and medium-sized enterprises. One of them is, if not started, how long can the enterprises last? Data show that 34% of enterprises can only maintain 1 months. 17.91% The business can last for 3 months. 9.96% Enterprises can last for more than 6 months.

Cheng Weixiong, an independent analyst in shoe and garment industry, said that there is no cash for enterprises without profits, and that no cash can survive in the face of major crises is a miracle? Some local enterprises start to burn money as the leading factor, pull some investment into a plan, and use cash more rugged. They do not work hard on products and models, but they work hard to study investors' preferences. They seem to be a new economy or digital technology, but the research on cash flow brought by user experience and sustainable value is not enough. .

The industry believes that the negative impact of the epidemic on the textile and garment industry in the short term is significant, and the performance of the relevant listed companies in the first quarter is expected to be affected to varying degrees. However, in Zhejiang Merchants Securities analyst Yu Jian, the impact of the new crown epidemic on garment enterprises is expected to be smaller than market expectations. The main reasons lie in several aspects: first, the onset time of the epidemic is approaching spring vacation, which does not affect the peak sales period before the festival, and the main period is after the festival and after the holiday. Make up, the impact is small; two, a number of channel parties have a total time to overcome the difficulties and take the initiative to reduce rent and rent reduction during the festival and after the holidays, which will greatly alleviate the impact and the cost reduction is expected to exceed expectations. Three, the epidemic in the early part of the country has spread to the whole country due to slower response in some areas, but after that, the epidemic situation is expected to be accelerated under the strict isolation measures. Thereafter, similar sports and other healthy and functional brand needs are needed. Hope is expected to erupt further.

Yu Jian judged that if the epidemic situation was controlled in 2 and March, clothing terminal retail would gradually resume in April, and the impact of post sale sales would be limited.

In addition, online sales with good momentum are expected to be part of the impact of retail sales. Yu Jian further pointed out that at present, China has become one of the most developed countries in the world. As of December 2019, online retail sales of physical commodities accounted for more than 100%. 20.7% 。 For the apparel industry, it is expected that the growth rate of apparel online is expected to reach 2019. 23.5% The scale exceeded 1 trillion yuan. During the Spring Festival, many businesses encouraged offline sales of online sales, and even real estate companies such as Zhonghai real estate and times China have turned to online sales.

During the Spring Festival, local clothing brands actively launched online sales, such as electronic commerce, WeChat mall, small programs, friends circle, and so on. However, with the improvement of residents' living standard, consumer demand is changing from material demand to pursuit of a better life demand. According to the statistics of the National Bureau of statistics, the basic demand for medical treatment, travel and entertainment, education, food and so on decreased in 2013-2018 years.

From the point of view of reducing rent, Yu Jian predicts that the average selling price of clothing brand enterprises is about 25%, and that other industries such as renting and selling are higher than those of restaurants. Taking the catering industry as an example, it is estimated that the rental ratio of the representative enterprise Xibei naked noodles village is only 10%, far lower than that of clothing enterprises. Therefore, the reduction of rent and rent in the national channel is expected to have a greater effect on the cost relief of garment enterprises than that of other consuming industries such as restaurants. Wanda Plaza, the first to announce the nationwide exemption of rental property charges, now expects over 60 shopping centers, 5 department stores and 2 pedestrian streets nationwide to rent and rent free from different regions, different periods and different degrees.

Shi Hongmei, an analyst at Orient Securities, said 2 Since the next month, online stores have gradually resumed work and traffic needs to be restored. More and more Brand Company have increased the loss of offline retail through organizational channels, such as marketing and online live broadcast, which requires top-down decision-making efficiency and bottom-up execution, and also requires information system (online and offline inventory) and profit mechanism. (cooperation between distributors and Shopping Guides), logistics warehousing (order response speed) and so on. In fact, many brand leading enterprises have increased the creation and capital investment of various new retail modes such as social marketing and live broadcast before the outbreak, and the new crown epidemic has forced and accelerated the pace of new retail sales. In the medium term, the change brought about by this epidemic will obviously improve the operation efficiency, inventory management and precision marketing of the whole industry.

However, the industry admits that in addition to the epidemic situation, the winter sales are under the pressure of the warm winter weather in 2019, and the Spring Festival in 2020 is 11 days ahead of 2019. On the one hand, the sales cycle is shortened, resulting in an increase in inventory. On the other hand, the withdrawal of funds has slowed down, and the pressure of cash flow has increased.

Cheng Weixiong, an independent analyst in shoe and garment industry, pointed out that, regardless of difficult times or high gloss moments, the value of clothing brand combines the loyalty and reputation of user experience, while down-to-earth profits and cash flow have enough funds to support. In terms of product strength and brand power, user demand is truly oriented, and scale is not required. The user's lifestyle is still good after the outbreak.

Public information shows that Giordano is known as "the originator of casual wear". The company is mainly engaged in casual wear. The company was established in 1981 and listed in Hongkong in June 1991. The company provides a series of brands of women's wear, men's wear and children's wear products, including Giordano, Giordano junior, Giordano, BSX and other brands. As of September 30, 2017, the company had 2370 stores in more than 30 countries around the world. Most of these shops are located in Greater China, South Korea, Southeast Asia and the Middle East.

Giordano reported a year-on-year reduction in sales in the third quarter of September 30, 2019. 8.6% Group comparable sales decline 10.3% 。 This is the first half of Giordano's revenue decline. 11.12% Net profit decline 36.61% Another performance decline.

During the reporting period, the sales volume of the company in mainland China was HK $20 million 800 thousand, down compared with the same period last year. 17.13% 。 In all regions, only the Middle East has increased. Total sales volume is Ten point seven five HK $1 billion, compared with last year's Eleven point seven six HK $1 billion down 8.6% If the exchange rate is fixed at a fixed rate, it will fall. 7.1% In addition, Giordano's number of stores in this quarter has also decreased, especially in mainland China: as of September 30th, Giordano has 276 stores in mainland China, a net decrease of nearly 10%, and a total of 7 stores in other parts of the Asia Pacific region, with a total number of stores decreasing by 27. Home.