Fashion retailer Goldlion Holdings, which conducts 80 per cent of its business in the mainland, plans to tighten its control of operating costs to cushion the effects of a possible devaluation of the yuan. After the company's annual general meeting yesterday, chairman Tsang Hin-chi said Goldlion had changed its strategy of hiring sub-contractors to produce garments to manufacturing in-house in Meizhou, Guangdong. More than 80 per cent of Goldlion's $1.01 billion turnover last year was generated from the mainland market. The Meizhou factory produces ties, leather belts and other leather accessories. Mr Tsang said the factory would satisfy 20 per cent of the company's demand for shirts in the second half, increasing gradually to 50 per cent over two years. Company secretary Lam Kai-cheung said there was no mechanism to hedge the yuan due to its inconvertibility in the open market. The sluggish retail outlook in Hong Kong prompted Goldlion to close two shops in Mongkok and Tsim Sha Tsui in June.