Hong Kong-based sourcing company Global Brands said Tuesday it narrowed its first-half net loss to $40 million from $53 million.

Global Brands’ first-half sales for the six months ended June 30 declined 5 percent to $1.35 billion, which the company blamed on exchange rates and the “discontinuation of certain underperforming brands” in 2014 that were not reflected in 2015 financials. The company said sales would have risen 6 percent excluding those factors.

Global Brands chief executive officer and vice chairman Bruce Rockowitz said he expects business to pick up in the second half of the year. The company typically makes 60 percent of its revenue then due to seasonality from the back-to-school and Christmas seasons and the sale of heavier-weight fabrics and leather products.

“We will lose money in the first half of the year. That’s pretty much consistent with a company that’s wholesaling and retailing in the western part of the world,” he said.

Its total margin increased 1.4 percentage points to 31.7 percent as the company focused on higher-margin areas such as licensed character brands and its controlled brands portfolio.

The group operates five stores for the label Frye, which it owns outright, and will launch more outlets in Dallas, New York and Washington.

Meanwhile, South Korea will be a key market for its sportswear brand Spyder in the lead-up to the 2018 Winter Olympics, to be held in Pyeongchang.

“Korea is going to be very much a focus of outdoor and winter and it’s always been a very fashion-driven country,” Rockowitz said. The group plans on introducing Spyder over the next year into China. He continued: “The thing we were happy about is that China got the [Winter] Olympics in 2022….It’s a very long sort of next six or seven years for these two events, which will probably be a very big boom for outdoor and winter sports.”

Li & Fung spun off Global Brands, its global brands and licensing business, into a separately listed company in July of last year.

The firm is “maybe one or two months away from a major announcement,” Rockowitz said, with Seven Global, the group’s new joint venture with David Beckham and Simon Fuller.

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