I.T Group'S Annual Losses Of HK $700 Million, Hong Kong And Macao And The Mainland Market Showed Negative Growth.

In May 27th, Hongkong I.T group announced its end results for the year ended February 29, 2020.

Due to the multiple macroeconomic factors such as Sino US trade disputes, regional social events and the outbreak of COVID-19 in early 2020, there was a significant downward pressure on the retail environment and consumption intention of many operating areas. The performance of I.T group in the 19 / 20 financial year was not satisfactory, and a number of important indicators fell.

　　 The gross loss of HK $700 million in the year was 60%.

During the reporting period, the total turnover of I.T group decreased by 12.6% to HK $7 billion 719 million 400 thousand year-on-year, with a net loss of HK $745 million 800 thousand, while the net profit of HK $18 / 19 was HK $444 million 100 thousand. If the non cash impairment of goodwill, property, furniture and equipment and the usufruct assets was provisioning HK $613 million 400 thousand, the net loss should be HK $132 million 400 thousand, gross profit reduced by 16.1% to HK $4 billion 733 million 700 thousand, gross profit margin reduced to 61.3%. This is mainly due to the provision of additional discount activities. The basic loss per share is 62.5 Hong Kong cents (18 / 19 fiscal year is 37 HK cents per share). The Board recommends that the final dividend be paid for the year ended February 29, 2020 (18 / 19 nine fiscal year: 18 cents per share).

It is gratifying to note that in the financial year, I.T group has landed a new brand to further enhance and enrich the group's already brilliant brand portfolio.

During the period, the self created brand segment continued to be the source of I.T group's larger revenue contribution, reaching 60%.

　　 Hong Kong and Macao market turnover plunged 23.5%, closed 28 shops closed

The social instability in Hongkong intensified in the second half of the fiscal year. Meanwhile, the outbreak affected the inbound tourism in Hongkong and Macao, and further affected the operation of these areas.

During the reporting period, the market turnover in Hongkong and Macao decreased by 23.5% to HK $2 billion 620 million 200 thousand compared to the same period (accounting for 33.9% of the total group turnover), and total retail revenue also decreased by 23.3% to HK $2 billion 580 million 200 thousand. The decrease in turnover was due to the shrinking of the distribution network in Hongkong, the social instability and the outbreak of COVID-19. The loss will be HK $671 million 700 thousand, if the effect is not unless the cash allowance is applied, the operating loss will be HK $428 million 100 thousand.

During the period, 28 shops were closed in Hongkong and Macao.

　　 Net increase of 5 stores in mainland China, excluding allowance for impairment, affects operating profit of HK $100 million.

Although mainland China's business started fairly well in the financial year, its performance in the second half of the year was clear, because sales in many cities in mainland China were temporarily closed due to the outbreak of the epidemic, and sales in January 2020 and February fell sharply.

In the whole financial year, the mainland market turnover decreased by 9% to HK $3 billion 751 million 400 thousand, accounting for 48.6% of the total turnover of the group, and the total retail revenue decreased by 9.4% to HK $3 billion 700 million 100 thousand. The operating loss was HK $236 million 400 thousand.

During the period, only 5 shops were added to the mainland market.

I.T group said that it is still optimistic about China's future development prospects, because it sees its good development momentum and potential returns, especially those with high quality and innovative products.

　　 Japanese and US market performance is gratifying and turnover is up 4.9%

In contrast to Hong Kong, Macao and the mainland market, Japan and the US market recorded robust growth. Turnover increased by 4.9% to HK $1 billion 209 million 200 thousand (accounting for 15.7% of the group's total turnover). Total retail revenue also increased by 1.1% to HK $1 billion 66 million. Sales increased 4.9% to HK $1 billion 209 million 200 thousand, while gross margins fell to 70%.

During the period, I.T group opened four new stores, "A BathingApe" and "AAPE", in Tokyo, Osaka and Miami, Japan. These new stores are popular. I.T group's unique brand collection in these areas, namely A Bathing Ape series and its sub line, is full of resilience in the market which is plagued by many unfavorable macroeconomic factors.

　　 Acquisition of 10.9% stake in Acne Studios group

In May 10, 2019, the I.T group completed its acquisition of 10.9% stake in Acne Studios group with 483 million 300 thousand Swedish kronor (about HK $421 million 700 thousand). Acne Studios group is now listed as an associate company of the group. In the year ended February 29, 2020, I.T group accounted for HK $22 million 31 thousand of the joint venture and received a dividend of HK $11 million 658 thousand from the joint venture.

It is reported that the main business of Acne Studios group is to operate retail and wholesale business of men's and women's garments, shoes, accessories and denim garments in many countries in Europe and Asia and the United States with "Acne Studios" brand. I.T group has been a long-term wholesale partner of Acne Studios group. This acquisition will further enhance the cooperation between the two groups, and enable the management of the two groups to further develop their strong expertise in the retail industry to further promote business growth.

　　 2020 outlook

In March 2020, more than 90% of the I.T group's stores in China had been reopened, and sales began to recover as domestic conditions improved. Shops in Hongkong and Japan were all open and shops in the United States were temporarily closed.

I.T group said that it is difficult to accurately assess the actual impact of the COVID-19 epidemic on business performance in 2020. However, it is expected that its business will continue to face severe challenges in the coming period. Cost control is continuing and may be implemented at a faster rate and extended to all sectors of the group. Adjustment.