Lilang to ease up on mainland expansion

Fujian-based menswear company China Lilang plans to slow the pace of its store expansion in the second half, despite posting double-digit growth in both turnover and profit in the first six months of this year.

For the six months ended June, the company recorded a 22 per cent increase in turnover to 1.26 billion yuan (HK$1.54 billion) from a year earlier.

Gross profit climbed 32.9 per cent to 499.4 million yuan.

Gross profit margin was up 3.3 percentage points to 39.7 per cent, thanks to the company's "efforts in streamlining the supply chain", which helped cut costs.

But Hong Kong-listed China Lilang said it would adopt "a prudent attitude" to store expansion in the current half and adjust its plans "according to market conditions to reduce risks".

"The uncertain economic environment [has] weakened consumer sentiment, which is particularly noticeable in first-tier and second-tier cities" on the mainland, China Lilang chairman Wang Dongxing said.

At the end of June, the company operated 3,386 stores on the mainland, most of them more for its core LILANZ brand and the remainder for its L2 line.