Clothing retailer Giordano International, which posted a less than expected 5.4 per cent rise in full-year net profit, said it would close underperforming stores in Hong Kong but keep expanding on the mainland. Giordano, which closed 10 stores in Hong Kong last year, said the city's retail market outlook was murky but the mainland remained a strong market. 'We started to shift focus to the mainland from Hong Kong three years ago, and even if there was no financial crisis, we would still be focusing on the mainland because purchasing power in Hong Kong is not strong and rents are high,' said Peter Lau Kwok-kuen, chairman and chief executive. Giordano drew 35 per cent of sales from the mainland, while Hong Kong accounted for 18 per cent. The company also operates in other markets in the region such as Taiwan and Singapore. It plans a net increase of 90 outlets on the mainland this year, bringing total store number there to about 1,000. At present, it has 2,006 outlets worldwide. Giordano said net profit for last year rose 5.4 per cent to HK$311 million, from HK$295 million a year earlier, thanks to turnover growth and a gain of HK$41 million on disposal of manufacturing assets. However, excluding the one-off gain, net profit decreased 1.4 per cent to HK$290 million. The profit was lower than the HK$341.73 million forecast in a Thomson Reuters survey of 13 analysts. Turnover increased 6.3 per cent to HK$4.71 billion. Same-store sales slipped 1.5 per cent from 2.4 per cent growth in 2007. It announced a final dividend of 3 HK cents, bringing the year's payout ratio to 45.7 per cent, down from 108.6 per cent in 2007. 'It's very normal, reasonable and responsible to reduce the dividend payment and preserve cash to weather the financial crisis,' Mr Lau said. He expected the market to bottom out in the second or third quarter of this year. 'If things get better, the company will not rule out giving a good surprise to shareholders by paying more dividends,' Mr Lau said, adding that he was optimistic about the company's long-term prospects. However, in the first two months, it saw sales dropp 12.9 per cent, including the mainland. Same-store sales in the mainland segment grew 6.1 per cent, down from 15.2 per cent in 2007. Hong Kong recorded a 1.7 per cent drop from 8.1 per cent growth a year earlier.