$1b for acquisitions

PUBLISHED : Friday, 07 October, 2005, 12:00am
UPDATED : Friday, 07 October, 2005, 12:00am


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Giordano International has enough capital to embark on a $1 billion acquisition spree, the casual wear retailer said.

The firm, which announced a profit rise of 10.65 per cent to $187 million for the six months to June, said it might accelerate its expansion on the mainland.

Chairman Peter Lau Kwok-kuen said he expected China's retail sector to undergo massive consolidation in the coming years. 'There are too many brands in the mainland,' he said.

'We are eyeing those local chains that ran into trouble after aggressive expansion over the past two years,' he said.

With cash reserves of $727 million as at June, Mr Lau said the retailer could spend about $800 million to $1 billion on acquisitions.

Giordano operates more than 1,600 stores worldwide including 676 outlets in the mainland.

For the six months to June, turnover from the mainland increased 11.79 per cent from last year to $474 million. Hong Kong contributed $462 million, up 16.6 per cent from a year ago.