Watchmaker and retailer Dailywin Group has plunged into the red with a loss of $92.26 million in the year to March 31 from a profit of $1.13 million last year.
Finance director Norris Leong Weng-kin said the losses were compounded by $53 million in bad debts from mainland wholesalers due to the effects of the Asian financial crisis.
'They basically ran off without paying us,' Mr Leong said. 'So we won't be doing business with them again.' He said the group would stop selling through wholesalers, instead expanding its mainland retail network.
The decline in orders for its OEM (original equipment manufactured) products from Britain, Switzerland and the United States caused an operating loss for the year of $36.28 million, including provisions, against a profit of $5.14 million last year.
Turnover shrank by 39 per cent from a year before to $228.9 million due to a cutback in orders for watches and watch cases.
Chairman Eddie Leung Wai-ho said the group's TimeZone retail outlets had performed well on the mainland and 24 more stores would be opened this year. The group would also continue to expand its OEM business focusing on European and US markets this year.