Another Clothing Retailer Is In The Mire Of Loss. The Median Loss Of Crocodile Meal Is Over 130 Million.

Since the second half of last year, Hongkong's local retail, catering and tourism industries have been complaining repeatedly, and many listed companies have even fallen back on the way of development.

00122-HK, a local business in Hongkong, had no choice but to join in the losing track of its performance. The crocodile brand, once popular with men, could not bear the multiple impact of Hongkong market since last year.

　　 From profit to loss, the medium-term loss is expected to be HK $130 million -1.8 billion.

After three years, the crocodile shirt again disclosed to investors an earnings warning notice in February 19th.

The announcement said that compared with the combined profit of HK $41 million 610 thousand in the same period last year, it was expected that the unaudited interim results of the group in the 6 months ended January 31, 2020 would result in a total loss of HK $130 million and HK $180 million.

In the same period last year, crocodile realized HK $124 million in revenue and HK $41 million 610 thousand in net profit. In the current reporting period, the expected loss of HK $130 million -1.8 Hong Kong dollar suffered a great loss from surplus. It is worth noting that this is the first loss of crocodile shirt in three years. The loss of the crocodile shirt in the last medium-term report was only 3 million 215 thousand Hong Kong dollars in the middle of 2016/17.

In the history of business performance since the listing, the crocodile mid - term and annual reports have never lost more than HK $60 million. In view of this, the loss of the crocodile shirt has hit its most historical record and has really fallen into a quagmire that is hard to escape.

Fate under double impact

In fact, before the second half of 2019, the performance of crocodile was unstable and unstable. 2018/19 fiscal year, crocodile revenue declined slightly, but net profit fell by 81.1%.

In 2019, the global economic downturn, the depreciation of the renminbi, the two seasons of autumn and winter, the unusual weather and warm social movements and other factors impacted on the consumption power and consumption intention of Hongkong and overseas customers.

In the second half of 2019, the most influential part of the crocodile shirt was the social movement in Hongkong. The number of visitors dropped sharply due to the continued turbulence for six months. According to the data of Hongkong Tourism Development Bureau, the overall visitor arrivals in the second half of 2019 recorded a 39.1% decrease. Traffic, tourism and retail industry were the first to bear the brunt.

In July 31, 2019, the crocodile shirt operated 27 retail outlets in Hong Kong and Macao, and 13 in the mainland. The proportion of revenue in Hong Kong and Macao was over 75%, indicating that the performance was highly dependent on the growth of Hong Kong and Macao, while visitors to Hong Kong were the main force in the growth of retail industry in Hong Kong and Macao.

Last month, a threatening epidemic hit Hongkong's retail sector again. Data show that in January, the number of visitors to Hong Kong fell by 53% during the year, and the number of mainland visitors fell by 54%. Against this background, the retail industry in Hongkong said that clothing and department stores began to fall sharply on New Year's Eve and fell 50% in 10 days. Xie Qiu an, chairman of Hongkong Retail Management Association, said that during the period from January 24th to February 2nd, the business of clothing and department stores dropped by 50% to 60%, while the sale of high-end consumer goods dropped by 70% to 80%. "Many businesses have been closed for business because rent losses are bound to be closed, and at least they can save water and electricity costs."

Thus, the crocodile shirt that has ploughed into the Hongkong market has become a microcosm of the precarious retail industry in Hongkong.

And the business model of crocodile is also destined to be in a very passive position under the trend of the times. The business of crocodile shirt in Hongkong mainly sells clothing for offline shops, which is greatly affected by unfavorable social factors such as Hongkong's social movements, economic recession and epidemics. It can even be said to be "relying on the sky". Under the double impact of recent social movements and the epidemic, the crocodile fish shirt has nothing to resist and plunged into the deep valley in an instant.

In the mainland market, the mainland economy has seen its biggest slowdown in decades. The uncertain economic prospects, the Sino US trade friction, the deleveraging of the financial system for several years and the suppression of shadow banking have all resulted in limited credit flow and weakened the stimulus measures taken by the government to alleviate the impact of slowing demand, thus making the consumption atmosphere even more gloomy.

In addition, the mainland garment industry's strong rising, 600398-HK, 002029-CN and other mainland menswear brands continue to eat the market share of crocodile rare. In addition, the rise of electricity providers in the mainland in recent 10 years has accelerated the decline of the crocodile shirt.