THE weather-beaten factory building housing Giordano Holdings' headquarters appears to be a perfect reflection of a battered year for the garment retailer. But the humble architecture belies its ambitious plans. The firm already has a presence in eight countries besides Hong Kong. During this year, Giordano came to terms with successive blows from the Chinese Government, which made it probably the most frequent headline-maker in the territory's corporate circle. With the group often seen as an advocate of democracy and anti-communism, Chinese authorities ordered the closure of its Beijing outlet and when it subsequently reopened, another closure was ordered and the mainland-backed China Resources (Holdings) dumped its stake in the company. After the Tiananmen crackdown in 1989, the company made T-shirts with a message that urged senior Chinese officials to step down. That helped boost the retailer's popularity. But its management has decided to quit its political dabbling and concentrate on business. Commenting on the nature of the firm's corporate image, Terry Ng, director of the business development regional office, said Giordano was a regional garment retailer. 'In a sense, we don't have competitors because, unlike other local garment retailers, we are regional,' he said. 'In the coming year, we will continue to develop more markets in Southeast Asia.' To enhance sales, it plans to introduce market-specific designs. Currently, designs are only done in its New York studio but now it plans to draw its designs from various parts of the world in which it will sell. 'Every place has its own taste. We respond to customers,' Mr Ng said. Its reach is already extended to Taiwan, Singapore, China, Malaysia, Japan, the Philippines, South Korea and Thailand. It plans to have between 30 and 50 more franchisees in China next year, to add to the 33 already there. Of those, six are owned by the company and the rest are franchised. 'During the past half-year, mainlanders have been quick to accept our products,' said Mr Ng. The company's determination to penetrate the China market is evident from an advertisement featuring Chinese youths in Giordano clothes. In South Korea, where it has 19 outlets, it expects to set up 25 new outlets next year. It has scheduled the setting up of five outlets in Thailand next year, to add to the four outlets which should have been opened by this year-end. With nine outlets in Malaysia, it looks forward to opening 10 more in the country next year. About 24 new outlets are expected to open next year in the Philippines where there are already 21 outlets. 'The challenge for us is how to use our know-how to develop new markets, how to inject our culture into them,' said Mr Ng. It intends to enter the Indian market in 1996. 'In the past six months, some Indian companies have contacted us for deals. That indicates there can be a market for our goods in India,' he said. The group is in no hurry to increase the number of its outlets in developed markets such as Hong Kong, Singapore and Taiwan. 'In the past few years, growth has been fast in those markets,' Mr Ng said. 'Now they're at the optimal size, but not yet saturated. They still have a steady growth every year,' he said. The firm decided to focus on the regional market as a strategy to counter the gloomy retail market in Hong Kong. Giordano is so worried about high rentals in Hong Kong that it will not shy away from even shifting operations out of the territory. 'We do not rule out moving our headquarters out of Hong Kong if the rising operational costs in the territory get to an excruciating level,' Mr Ng said. 'But now we still feel Hong Kong is the most convenient place.' He said its Hong Kong retail operation saw the highest sale per footage of all markets, accounting for 30 to 40 per cent of its turnover in the profit and loss account. Its rentals amount to 18 per cent of local sales compared with the industry's average of more than 20 per cent, according to Mr Ng. He said that the three-year leases for a third of the Giordano outlets in Hong Kong would mature next year. An escalation of the property market could put pressure on the group's earnings. 'While we can't control rents, we seek to control staff costs which amount to about 10 per cent of sales,' said Mr Ng. The company always maintained a small staff though its sales staff was paid 20 per cent above the market rate in all the countries in which it operated, he said. Giordano has leased a 60,000 square foot production facility in the Philippines which is slated to start production next year. It will churn out 360,000 knitwear items every month, supplying outlets in Taiwan. The fabrics will be imported from China, Japan and the United States.