GIORDANO Holdings expects its Hong Kong operations to provide a steady income flow this year, says chief executive Peter Lau Kwok-kuen. He said the group was promoting efficiency and streamlining procedures to cope with escalating operating costs, particularly related to rentals and staff. The group was interested in developing its franchise business in South Korea, Philippines, Thailand and Indonesia, Mr Lau said yesterday. ''We will provide the franchise at a low cost initially and will earn the money later when the local partners establish themselves and order more products from us,'' Mr Lau said after officiating at the annual general meeting. Asked whether Giordano's business in China had been affected by the value-added tax (VAT), Mr Lau admitted it had cut into business by between eight to 10 per cent in January and February. But the effect was not so great in April, he said, noting that consumers were now absorbing the VAT. Giordano's joint-venture company, Tiger Enterprises, opened three shops last year and would open up more through franchising products, Mr Lau said. A total of 15 franchise shops had started up, making up 11 per cent of company turnover, he said. Jimmy Chan Kui-tim, an executive director, said last year the group met shareholders' expectations in terms of results and expected this year's to be even better. On July 1, the group would establish a joint venture in the Philippines in which it proposed to take a 30 per cent stake, he said.
