Following the sale of a 20% interest in the joint venture company, Libang (00891) (00891) broke the news of layoffs. According to Hong Kong media reports, Trinity Holdings (00891) closed its last production line in a Hong Kong garment factory this week, and 182 employees will be demobilized.

The company said it is optimizing supply chain operations to cope with the severe economic and retail environment in Greater China, and the above decision is part of the relevant measures. However, Libang reiterated that all other businesses will continue to operate.

Zhitong Finance learned that Trinity mainly engages in men's clothing retail and wholesale business in Greater China, Singapore and Europe, and also engages in its own brand licensing business globally. The brands it represents include "KENT&;CURWEN" endorsed by Beckham, "CERRUTI 1881" endorsed by movie star Tong Dawei, and "GIEVES&;HAWKES" endorsed by Hu Bing. It is reported that since 2015, Libang has turned from profit to loss, with a net profit of 161 million Hong Kong dollars in 2014 and a loss of 89 million Hong Kong dollars in 2015. In the first half of 2016, Libang's loss situation remained unchanged.

In the first half of 2016, Tribon revenue shrank by 11.5% to HK$890.8 million, while same-store sales fell by 14.2%. Trinity said that due to the decline in Chinese tourists and the downturn in local consumption, the retail markets in Hong Kong and Macau continued to be under pressure, which adversely affected the performance of the Group. Among them, retail sales in Hong Kong and Macao fell by 13% year-on-year, the mainland fell by 23.1%, Taiwan fell by 17.8% to 64.8 million Hong Kong dollars, and Europe fell by 1.3%.

During the period, the loss attributable to Trinity shareholders was approximately HK$200 million, compared to HK$47.4 million in the same period in 2015. The losses are mainly due to the following reasons: core operating losses increased by HK$51.9 million; restructuring costs of HK$22.8 million and the recognized income tax deduction decreased by HK$22.6 million; in addition, the remeasured gains of contingent acquisition consideration payable in acquisition activities were included in the same period in 2015 50 million Hong Kong dollars, and there was no such income in the first half of last year. In addition, in order to streamline expenses and improve operational efficiency, the company also closed 16 stores and laid off 73 employees.

As of the end of June 2016, Tribon’s cash and cash equivalents were only HK$567.2 million, net debt was HK$678.5 million, and the debt ratio increased to 18.5%, compared with only 9.1% and 13.3% in June and December 2015, respectively.

However, Libang and Libiao (00787) (00787) are the same as Li & Fung (00494), but their performance is different. It was also affected by the downturn in the retail industry, but Li Biao brand showed a reverse growth. For the six months ended September 30, 2016, the profit from standard profit increased by 15% year-on-year to 1.844 billion US dollars, and net profit increased by 300% year-on-year to 44 million US dollars. The profit from core operation of Libiao increased by 147.4% to 49 million US dollars, while the core operation loss of Libang increased by more than 40%. It is understood that the licensed brands owned by Libiao include Calvin Klein, Cole Haan, Michael Kors, Guess, Coach, Nautica, Tommy Hilfiger, Nine West and Under Armour.

In September of this year, Libiao also established a new joint venture with American singer Katy Perry (Sister Fruit) to expand the existing cooperation with Katy Perry in the shoe series. The new joint venture company will focus on developing the Katy Perry brand and adding new products. The first shoe series will be released in the United States and around the world in spring 2017.