Cabbeen Announces 2015 Interim Results

HONG KONG, July 30, 2015 /PRNewswire/ -- Cabbeen Fashion Limited ("Cabbeen", the "Company" or the "Group"; stock code: 2030), one of the leading menswear designer brands in China, is pleased to announce its interim results for the six months ended 30 June 2015 (the "Period").

Results and Operation Highlights:

Remarkable growth in results

• Turnover increased by 30.7% to RMB561.3 million
• Gross profit increased by 40.4% to RMB262.9 million with gross profit margin increased from 43.6% to 46.8% y-o-y
• Profit for the Period increased by 31.9% to RMB149.2 million and core profit increased by 40.5% to RMB121.9 million
• Basic earnings per share increased by 31.3% to RMB0.21
• Proposed an interim dividend of HK10.5 cents per share

Emerging e-commerce business

• E-commerce revenue for the Period increased by over 900%, contribution to turnover increased significantly

Strong retail sales and network

• Overall combined sales value at retail outlets increased by approximately 8%
• Same-store sales growth for retail outlets with operation history of at least 24 months was 3%
• Up to 30 June 2015, sell-through rate at retail level of 2014 collections was over 85%

A brand-new concept store in Shanghai

• The concept store with floor area over 1,000 m² opened in June 2015, cross-sells all of Cabbeen brands' products with a collection of other lifestyle products, a cafe and a salon under one roof

Financial Highlights:

During the Period, the Company recorded a turnover of approximately RMB561.3 million (1H2014: RMB429.4 million), representing an increase of 30.7% year-on-year. The increase in the turnover was mainly driven by an increase in sales volume. Gross profit for the Period increased by 40.4% to RMB262.9 million (1H2014: RMB187.3) with gross profit margin of 46.8% (1H2014: 43.6%). The slight increase in gross profit margin was mainly because the percentage contribution of consignment and retail revenue increased, given the price of consignment and retail products was higher than the price of wholesale products. Profit for the Period increased by 31.9% to approximately RMB149.2 million (1H2014: RMB113.1 million). The increase in profit for the Period was mainly attributable to an increase in revenue and gross profit. Excluding the effect of the government grants received and the relevant income tax, core profit increased by 40.5% to RMB121.9 million. Earnings per share were RMB0.21 (1H2014: RMB0.16). The Board recommended an interim dividend of HK10.5 cents per share (1H2014: HK8 cents).

Total sales volume recorded an increase of approximately 34.4% to 4.3 million units. During the Period, the overall combined sales value of Cabbeen at retail outlets increased by approximately 8% and same-store sales growth for retail outlets with operation history of at least 24 months was 3%. Up to 30 June 2015, sell-through rate at retail level of the Company 2014 collections was over 85% and 2015 spring/summer collections was over 45%.

For the retail network, the Company had 1,061 retail outlets (including 26 self-operated retail outlets) as of 30 June 2015. The retail outlets are situated in over 300 cities in the mainland China. Department store concessionaries, street shops and shopping mall shops accounted for approximately 42%, 37% and 21%, respectively, of total retail outlets as of 30 June 2015. During the Period, 253 retail outlets were operated on consignment basis. The Company plans to gradually increase the number of retail outlets to be operated on such model in the coming few years and believes consignment business model helps Cabbeen to improve operation efficiency as well as to induce more distributors to join the Company to expand local retail network.

On the other hand, as the Company's brand strategy is drawing attention to its brands, broadcasting brand status and marking itself out against its competitors, the Group opened its first concept store which cross-sells all of Cabbeen brands' products with a collection of other lifestyle products. It is believed that concept stores could promote brand awareness and market position, which are also crucial for getting floor areas in quality shopping area with good customer traffic.

The Company keeps direct communications with its VIP members in order to provide information about promotion events and new product launches. For the six months ended 30 June 2015, retail sales to the Group's VIP members accounted for over 39% of total retail revenue.

E-commerce revenue for the Period increased by over 900% to RMB68.2 million due to strong sales performance of the online platform and good sell-through rates of channel inventories. In June 2015, Cabbeen started its own online store on Tall.com and simultaneously launched an online flagship store on its official website. Operating the online flagship store by the Company itself could further promote its brands, allow the Group to capture the enormous opportunity in the online consumption market and help track market and customer data at the same time. E-commerce will become a key driver for Cabbeen's future growth with further investment on developing relevant sales channels going forward.

Commenting on the future prospects of the Company, Mr. Ziming Yang, Chairman of Cabbeen said, "China's apparel market has been growing steadily. Consumers not only have growing purchasing power but also are increasingly meticulous about fashion, value for money and quality. In addition, the garment market in mainland China is highly fragmented, with fierce competition from local and foreign brands. Nevertheless, we continue to have an optimistic view with respect of the outlook of the fashion apparel market in the long run. China's growing middle class will generate a strong demand for style-oriented, quality garment products. Apparel companies which have so far failed to produce quality apparel that meets customers' needs are struggling to survive and will soon be supplanted amid the industry's consolidation.

"As one of the largest fashion causal Chinese designer brands, we value creativity and original designs as well as operational efficiency. We believe we can offer products that suit customers' needs and have the ability to closely gauge market trends and grasp the opportunities for further development."

About Cabbeen

Cabbeen is a leading fashion casual menswear company in China, which is principally engaged in the design of apparel, footwear and accessories, brand management and sales of fashion casual apparels. According to the China Fashion Association, Cabbeen is a leading Chinese designer brand based on factors including retail revenue, the number of retail outlets and brand awareness. The Company currently owns four fashion menswear brands, namely "Cabbeen Lifestyle", "Cabbeen Urban" "Cabbeen Chic" and "2AM".

For further inquiries, please contact:

iPR Ogilvy & Mather

Tina Law/ Candy Tam/ Rhonda Leung
Tel:      (852) 2136 6181 /3920 7626 /3920 7625
Fax:     (852) 3170 6606
Email:  cabbeen@iprogilvy.com