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Hong Kong's Giordano plans to open stores in India
2005-05-30 04:09:25 THE ASSOCIATED PRESS

HONG KONG, May 30 (AP) -- Hong Kong fashion retailer and distributor Giordano International Ltd. plans to open stores in India in early 2006 to take advantage of a boom in consumer spending there.

The expansion would involve a joint venture with a local partner and would start with an initial target of four to six outlets in the first year, said William Yue, Giordano's director of corporate and external affairs.

Yue declined to name the local partner because of a confidentiality clause in the joint venture agreement.

"India has huge market potential for us, especially because incomes there have picked up significantly," Yue said in an interview with Dow Jones Newswires.

Founded in 1981, Giordano, which specializes in casual and office clothing, operates over 1,500 stores in Asia, Australia and the Middle East. The company, whose revenue totaled 4 billion Hong Kong dollars last year, was listed on the Hong Kong stock exchange in 1991.

Yue said that besides plans to establish a retail base in India, the company is also considering whether the country could become a source base for Giordano's products. "But the main problem for sourcing in India is its transportation infrastructure," he said.

Giordano's retail outlets are focused on China, where it had 671 stores at end-2004, and Taiwan with 236 stores. Hong Kong, where Giordano operates 92 stores, is the company's second biggest revenue center after China. In the rest of the region, Giordano has a presence in Japan and most Southeast Asian nations.

Yue said Giordano is looking to expand, especially into developing countries such as in Africa.

"We believe our product pricing would be relatively acceptable there -- and in Eastern Europe, too," he said.

China, which accounted for 24 percent of Giordano's revenue in 2004, will continue to be the main growth driver for the company's earnings, as well its "emphasis of expansion," Yue said.

"We already have full coverage in places such as Hong Kong and Singapore, so their market potential is relatively smaller compared to China," where there is room to expand, said Yue.

Giordano plans to open 100 new stores in China in 2005 after adding 90 stores last year.

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