Silk apparel maker China Ting Group aims to improve profit margins by continuing to rapidly expand its lucrative retail outlets, chief executive Ting Hung-yi (below) said.
Having opened almost 60 stores this year, the Hong Kong-listed firm aims to increase its mainland network from 360 to 460 next year and 580 in 2008, Mr Ting said at the end of a general meeting yesterday.
By 2009, he wants retail's contribution to increase to 25 per cent of the company's turnover, from 10 per cent now.
The gross profit margin of the company's retail business is 65 per cent while the gross margin from contract manufacturing of silk apparel, which accounts for 90 per cent of its revenue, is 35 per cent, Mr Ting said.
'That is why we place so much hope on retail.'
Helped by growing retail sales, the Hangzhou-based company's overall gross profit margin rose to about 37 per cent from about 30 per cent last year, according to a report by BNP Paribas Peregrine.
China Ting's turnover last year was HK$1.9 billion with net profit of HK$381 million.