March 28: Daphne, a Taiwan funded women's shoe group, continued to make a huge loss last year, with a loss of HK $734.2 million in 2017, only slightly narrowed compared with HK $819.1 million in 2016. With a loss of HK $378.9 million in 2015, the group has accumulated a loss of HK $1.93 billion in the three years when traditional women's shoes have turned sharply downward.

　　达芙妮表示，2017年是集团重要一年，启动多项转型措施应对市场挑战。

　　However, the annual results show that Daphne group is hard to stop the downward trend. The turnover of Daphne group fell 19.9% to hkd52110 million for the whole year, compared with hkd6501.7 million in 2016. The decline in sales was mainly due to a 12.4% drop in same store sales of Daphne's core brands, as well as a net 21.9% decrease in store impact.
During the period, the turnover of core brands fell by 20.8% to HK $4703.2 million, compared with HK $59360 million in 2016.
In 2017, Daphne's core brands closed 1009 stores, from 4598 to 3589, including 943 to 3303 Direct stores and 66 to 286 franchise stores. In 2015 and 2016, the group has closed 805 and 1030 stores respectively, and the sales points of the group's core brands by the end of December were 36% lower than that at the end of 2015.
In 2017, Daphne's gross profit fell by 16.9% to HK $27530 million, compared with HK $311.7 million in 2016. Its gross profit margin increased by 190 basis points on an annual basis instead of 52.8%, which was mainly stimulated by the increase of the gross profit margin of core brands, and the operating cost decreased by 17.2% during the period.
During the reporting period, the gross profit margin of Daphne's core brands improved by 190 basis points to 49.2%, with an average selling price of 159 yuan the same as that in 2016.
Daphne recorded an operating loss of HK $688.8 million for the year, down 15.9% from the loss of HK $815.5 million in 2016.
In 2017, sales of other brand businesses including Aiyi, step higher, airoushi and Aldo also dropped 18.2% to HK $733.5 million, and sales points decreased from 302 to 247, with revenue of HK $813 million in 2016. The growth of e-commerce business also dragged down the gross profit margin of the sector by 80 basis points to 58.2%. The segment business recorded a loss of HK $7.1 million last year, and a small profit of HK $7.8 million in 2016.
In the case of continuous sales slump, store closing and inventory clearing at discount, Daphne's inventory decreased by 11.8% year-on-year at the end of 2017, from HK $1414.5 million to HK $1246.9 million, and the inventory cycle also decreased by 3 days to 198 days.
As of the end of the financial year, Daphne's cash and balance were 486.3 million yuan, which was cut back on an annual basis. In 2016, Daphne's cash and balance were 989.5 million yuan, short-term loans were 156.3 million yuan, and net cash was 330 million yuan, which was cut back on an annual basis. In 2016, Daphne's cash and balance were 692.8 million yuan.
As of Wednesday's close, Daphne International Holdings Limited (0210. HK) has a market value of HK $825 million and a share price of HK $0.50.
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