Q1 revenue surges 32.3% at Zuoan Fashion (China)

Zuoan Fashion Limited, a leading design-driven fashion casual menswear company in China, announced its financial results for the first quarter ended March 31, 2012.

First Quarter 2012 Financial Performance:
Revenue for the first quarter was RMB279.9 million ($44.5 million), a 32.3% increase from RMB211.5 million ($33.6 million) in the same period last year. The increase in revenue was driven by both distributor and direct store sales volume.

First quarter distributor sales increased 23.1% to RMB260.4 million compared to RMB211.5 million in the first quarter of 2011. First quarter 2012 self-operated direct store and flagship store sales were RMB19.6 million in the first quarter 2012.

James Hong, Founder, Chairman of the Board and Chief Executive Officer, commented, "We are very pleased that 2012 is off to a good start and believe we remain well-positioned to deliver on our strategic and financial objectives this year. Our solid first quarter performance reflects our ability to further penetrate China's domestic market for fashion casual menswear. First quarter revenue was within our forecasted range and net income exceeded our estimates.

"We believe our marketing efforts over the past year have led to increased brand recognition and greater customer demand. Much of this success stems from our international initiatives which include our active participation in several international trade shows and our collaborations with Paris-based Nelly Rodi, and Japan fashion designer, Mr. Okada Hiroyuki, which together have culminated in a more fashionable and complete collection with greater variety and style.

“The sequential growth of our business in terms of our total store count and sales volumes reflects our ability to increasingly strengthen our brand equity among local customers and efficiently execute of our network expansion plan, with a total of 1,295 store locations at the end of March 31, 2012.

"Looking ahead, we will continue to fortify our position in China's fashion casual menswear market by executing our development strategy and expanding our geographic presence. We have a very strong balance sheet including a record level of cash, minimal debt and a much lower trade receivables position compared to last quarter. While we remain cautious due to a softening retail environment impacted by the global economic slowdown, we remain positive on our longer-term sales and profit growth opportunities."
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