China’s Ever-Glory upbeat despite 6.8% sales fall

By

Barbara Santamaria

Published
Apr 5, 2017

Chinese fashion retailer Ever-Glory has reported a 6.8% fall in full year sales as lacklustre consumer confidence took its toll on the company’s wholesale and retail business.

In the 12 months to December 31, the clothing chain saw total sales decrease to $392.7 million, primarily due to falls in both retail and wholesale revenues. The company’s retail business fell by 9.1% to $204.4 million, while the wholesale business declined by 4.3% to $188.2 million.

The wholesale performance was attributed to lower sales in Mainland China, Hong Kong China, Germany, the United Kingdom and Japan, but wholesale revenue increased in Europe and the US.

Net income attributable to the company was $6.8 million, a 50.2% drop on the previous year.

Despite the results, Ever-Glory chief financial officer Jason Jiansong Wang was upbeat, saying that the business “remains solid and showed resilience to the slowdown of global economies.”

“In 2016, we maintained the gross margin for wholesale business at the same level compared with the year-ago period while improving the gross margin for retail business by 110 basis points, mainly due to the decreased rent costs,” said Jiansong Wang.

In the period, the brand focused on making more strategic real estate decisions and opened a net total of 33 stores during the fourth quarter. As of December 31 the company operated 1,378 stores in China and hopes to increase this number to 1,450 by the end of 2017.

This year, Ever-Glory will also continue working towards improving its inventory management and carry out cost control measures to further strengthen profitability.

The wholesale segment is expected to maintain its sales trend in the US and improve in Europe and Japan. “We believe our extensive product development and one-stop supply chain management expertise, as well as network of high quality, reliable and cost-efficient sourcing channels and manufacturers will continue to drive the long-term growth of our wholesales business,” said Yihua Kang, chairman, president and CEO of Ever-Glory.

Based in Nanjing, China, Ever-Glory is both a retailer of branded fashion apparel and a solutions provider, offering complete set of services of supply chain management on fabric development and design, sampling, sourcing, quality control, manufacturing, logistics, customs clearance and distribution.

The company has been listed on the NASDAQ Global Market since 2014.