Chaifa expects full-year profits to hold steady

PUBLISHED : Wednesday, 29 January, 1997, 12:00am
UPDATED : Wednesday, 29 January, 1997, 12:00am

Garment and accessories firm Chaifa Holdings expects growth for last year to level off, because it says that China's interest rate cuts have yet to filter through to the retail market.

'Growth for last year will be steady, unlike the rapid growth seen in previous years,' chairman John Chan Chun-tung said.

Retail sales in China had not picked up immediately after two interest rate cuts in the middle of last year and sales were comparable to those of 1995.

Mr Chan said he expected better times this year and next because the interest rate cuts would be reflected in the market by March this year.

China's huge reserves, stable currency and resumption of sovereignty over Hong Kong this year would also provide a favourable environment for retail sales growth.

Chaifa, which makes and distributes garments and accessories under the Playboy, Garfield and Arnold Palmer labels, reported a 30 per cent jump in profit to $32 million for the six months to last September.

Mr Chan said Chaifa was in discussion with two companies with a view to acquiring the design, manufacturing and distribution rights of their international brand-name products.

He said an announcement concerning one could be made by March or April.

Chaifa would also seek to add 150 outlets this year, to be devoted equally to the Playboy, Garfield and Arnold Palmer brand names, Mr Chan said. At present, it has 531 Playboy outlets, 77 Arnold Palmer outlets and 50 Garfield outlets.

The completion of a Chaifa plant in Shantou, Guangdong in June would boost profits by 1 percentage point, he said.