BUSINESS / FINANCIAL

Chinese Fashion Brands See Pay

Cuts, 20 to 30 Percent Drops in Q1
One sales representative in Beijing said she made just about $42 in the
first half of March.
By Tianwei Zhang on April 20, 2020

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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 WHAT WE'RE
the first three months of the year, according to its Hong Kong
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Exchange filing. Fila is seeing a midsingle-digit percentage

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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 Robb Recommends:
and wholesale are down 30 to 40 percent and 10 to 20 percent, Mileo New York’s Healing
respectively, while online sales will grow 10 to 20 percent. The Skincare Elixirs Are Made
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 Robb Recommends: An
second largest in the world, including France’s Kidiliz Group, Olive Oil From a
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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
Robb Recommends: How
slump in sales in the same period.
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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.
@wwd
Huafu Fashion, a leading yarn supplier and manufacturer, Gaga has landed a new, very fashionable,

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.
— as the face of @MaisonValentino’s
ng perfume. “Lady Gaga means freedom,
nsciousness, pure heart,” creative director
paolo Piccioli said in a statement. “Her
icipation in this campaign elevates the
c power of the project to the highest level.
fragrance, named Voce Viva, is out in
mber and is meant to celebrate one’s own

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.
e, life, self and style. It is a perfume for
one — no specific gender — according to
ce Delaye, Valentino Beauty global brand
dent, who said Piccioli “doesn’t talk about
n or men, he talks about individuals.” Tap
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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.

China GDP Records Historic 6.8% Drop, Consumer Recovery

Shows Mixed Signs

Hong Kong Forecast To Lose 5,200 Shops; 10,400 Retail Jobs By

June

COVID-19 Hits Chinese Fashion Manufacturing Hard

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