Les Enphants Co (麗嬰房), a major retailer of children’s apparel, saw domestic sales decline over the past two months as consumers reduced spending and will take a more conservative approach to store expansion this year, an official said yesterday.
Despite positive growth in sales in the first five months of this year, Les Enphants said the decline in economic confidence over the past couple of months led to a sales drop of 0.4 percent and 0.9 percent in June and last month respectively compared with the same months last year.
“Although it was less than 1 percent, it was a significant decline for us,” chairman Eric Lin (林泰生) told a press conference.
The company said it planned for 5 percent sales growth for the first seven months of the year, but cut the forecast to 4 percent after poor sales in the past two months.
“To us, a 1 percentage point decline is equivalent to a 20 percent decline [from 5 percent down to 4 percent],” Lin said.
The latest government data showed that domestic trade — both retail and wholesale — slowed in June from May because of higher borrowing costs after the central bank’s rate hikes as well as reduced consumer spending.
Retail sales, for instance, fell 4 percent to NT$266.8 billion (US$8.7 billion) in June compared with the same month last year, following a 2.5 percent increase in May to NT$274.2 billion, the Ministry of Economic Affairs announced on July 22.
Lin said the company’s outlook for the second half of this year was not clear.
Nevertheless, Lin said, given the nation’s healthy economic fundamentals, he was confident about Taiwan’s economic prospects, although positive results might not be visible in the short-term.
Les Enphants has opened more than 1,000 stores in China, but its market share in that country is still less than 1 percent, Lin said, adding that the Chinese market has great potential.
The company plans to open 150 stores in China this year and had already opened more than 100 of them by the end of last month, he said.
In other developments, Les Enphants and Taipei Fubon Bank (台北富邦銀行) launched a co-branded credit card yesterday.
Les Enphants said the target market was new moms, who will receive a 20 percent discount when buying children’s apparel at the company’s stores, both in Taiwan and China.
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