The Hong Kong-listed fashion retail group says it is working to change consumer perception that it’s a budget brand.

In the year to December, Giordano improved sales by 8.3 percent to $431.8 million — despite its store count falling by 5.9 per cent — and net profit reached $24.3 million, compared to a loss of $14.3 million the previous year.

“Our efforts toward upgrading the Giordano brands are continuing with encouraging results, evidenced by higher selling prices and gross margins,” chairman and chief executive Peter Lau said in a stock-exchange filing. “The group is determined to move away from the budget brand perception.”

Giordano operates 2,056 points-of-sale through a combination of its own stores, franchisees and a joint venture in South Korea. Sales in Southeast Asia and Australia, which accounted for 30.9 percent of its overall turnover, rose 9.4 percent year-on-year. Giordano says Indonesia was its largest market with “remarkable” sales growth but did not break out figures for the country specifically.

Sales in mainland China, which account for 22.7 percent of its business, rose by 9.3 percent, but its fastest-growing market was the Gulf, up 35.7 percent, attributed to successful localised merchandise and marketing programmes boosting demand.

In Taiwan, sales were down 7.1 percent and in Hong Kong and Macau by 1.9 percent.

Giordano’s online sales surged 25.5 percent year on year and now account for 12.1 percent of group turnover. Part of the growth was the result of partnering with third-party marketplaces. In China and South Korea, online now accounts for almost 40 percent of overall sales, “with decent profitability”.

The company said it expects the business environment through the rest of the year to remain volatile, especially in Greater China.

“At the time of writing, the Omicron variant outbreak severely hurt sales in Hong Kong, and we do not expect the situation to improve for the most part of the year. The group will temporarily downsize the Hong Kong operations until there are clear and positive signs of economic recovery.”

Meanwhile, Lau said, Giordano would continue its franchise expansion in developing countries through the coming year, mainly in Africa.

“The group’s international presence is a natural hedging against regional ebbs. Our business in the Gulf Cooperation Council and Southeast Asia is robust and growing.”

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