Fashion distributor I.T warns annual loss will more than double to US$90 million as coronavirus hits sales
- The distributor of French Connection and A Bathing Ape had predicted a loss of HK$300 million in April
- Analyst says Hong Kong retailers will continue to be hit by Covid-19 and social unrest
The distributor of European and Japanese brands such as French Connection and A Bathing Ape said net loss will reach at least HK$700 million (US$90.3 million) for the year ended February 29, compared with the HK$300 million forecast in early April.
An increase in impairment provision in the fourth quarter has exacerbated the pain, I.T said. The results are due to be released on Wednesday.
In its previous profit warning, the company had highlighted the impact of the social unrest in Hong Kong on its sales, worsened by the ongoing coronavirus pandemic. “Inbound tourism and spending enthusiasm in several of the group’s key operating markets such as Hong Kong and Mainland China were adversely impacted, further suppressing the already dampened retail landscape,” it said.
The company had also asked employees to take unpaid leave in February and March to prevent its financial situation from deteriorating further.
The profit warning comes as around 10,400 retail workers are expected to lose jobs by the end of this month, according to the trade group Hong Kong Retail Management. Some 5,200 stores will close this month with the possibility of thousands more shutting down later in the year.