LONDON — The impact of coronavirus on the Chinese fashion industry is coming more into focus as big brands begin to outline their first quarter results.
Anta, the largest sportswear player in China and owner of Fila and Amer Sports, is expected to see a 20 to 25 percent decline in the first three months of the year, according to its Hong Kong Exchange filing. Fila is seeing a midsingle-digit percentage drop, while other brands, such as Anta, Descente, Kolon Sport and Kingkow, are expected to experience a high-single-digit slide.
China’s second-largest sportswear manufacturer, Li-Ning, will see a 10 to 20 percent decrease in overall sales. Physical retail and wholesale are down 30 to 40 percent and 10 to 20 percent, respectively, while online sales will grow 10 to 20 percent. The brand closed 224 points of sales compared to the same period last year.
High-street brand Semir, with more than 5,000 stores across China, said sales will drop 30 percent and profits will shrink 93.66 to 95.68 percent to 15 million to 22 million renminbi, or $2.1 million to $3.1 million. Its children’s wear business, the second largest in the world, including France’s Kidiliz Group, will see a bigger loss than last year.
Casualwear giant Meters/bonwe said it will post a loss of 150 million to 250 million renminbi, or $21.2 million to $35.3 million, for the first three months, but it saw a 30 percent increase in online orders. Giordano, another player in the casualwear field with 2,263 stores worldwide, reported a 34.6 slump in sales in the same period.
Men’s wear conglomerate Septwolves, which holds the Chinese license for Karl Lagerfeld and is an investor in Modern Media, expects to lose as much as 48 million renminbi, or $6.8 million, in the period. Lilanz, a pioneer in the business casual category, said first quarter sales will decline 40 to 45 percent.
Suppliers are also feeling the pain. Zhejiang XinAo Textiles, a premium wool supplier with Woolmark, Icicle, Ports and Exception de Mixmind among its clients, posted a 31.9 percent decrease in revenues, but profits climbed 32.28 percent in the first quarter.
Huafu Fashion, a leading yarn supplier and manufacturer, expects to see a loss of between 15 million and 35 million renminbi, or $2.1 million to $4.9 million, in the first quarter, compared to a profit of 172 million renminbi in the same period in 2019.
According to the National Bureau of Statistics of China, retail sales in March were slightly improved — off 15.8 percent, after falling 19 percent in January and February — but categories like clothing were still struggling, down 34.8 percent year-over-year.
Brands and retailers are cutting back on payments to save costs. L Catterton Asia-backed Trendy Group — the owner of Ochirly, Trendiano, Miss Sixty, Five Plus, Denham and the China business of Superdry — implemented pay cuts as high as 50 percent for its 8,000-plus employees in March and April.
In a chat history seen by WWD, one Trendiano sales representative in Beijing said she made less than 300 renminbi, or $42.41, in the first half of March, while the usual average salary for this position is 5,000 renminbi, or $706.
Shenzhen Ellassay Fashion, which operates the China business of Laurel, Ed Hardy, Vivienne Tam and Self-Portrait as well as its own brand, said last week its mid- to top-level management will take a voluntary pay cut, and sales staff will also be impacted.
Hong Kong newspaper Apple Daily also reported that Lane Crawford Joyce Group staff have been told they would see salary cuts of between 8 and 18 percent for a period of 11 months, with senior executives seeing cuts of 20 to 50 percent.