Climate Change Data

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic disruptions
• Rise in coronavirus infections leading to travel restrictions and lockdowns
• Recent housing market downturn in the PRC affecting consumption sentiment
• Intense competition in the fashion industry
• Supply chain disruptions
• Financial difficulties of distributors
• Potential risks from extreme weather conditions

Mitigation Strategies

• Slowed down physical store investments in the second half of 2021
• Reduced purchase orders of products for the first half of 2022
• Investing in wider adoption of technologies in areas including cloud computing, automation and data analytics
• Optimizing store network to better locations
• Investing in brand promotion
• Developing long-standing relationships with vendors to minimize supply disruptions
• Careful selection of suppliers with assessment criteria including track record, experience, financial strength, reputation, ability to produce high-quality products and quality control effectiveness
• Requiring suppliers to comply with anti-bribery policy
• Monitoring the financial condition and repayment history of distributors
• Providing training to distributors’ key sales personnel to provide quality and value-added customer services

Supply Chain Management

Responsible Procurement

• Careful selection of suppliers based on assessment criteria
• Compliance with anti-bribery policy

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Environmental performance
• Responsible employer
• Good citizen
• Ethical operation

Environmental Achievements

• Implemented a low-carbon policy and encouraged employees to conserve energy.
• Reduced non-hazardous waste intensity to 0.78KG/RMB’000 (2021: 0.84KG/RMB’000).

Social Achievements

• Provided free surgical masks and organized COVID-19 vaccinations for employees.
• Offered flexi-time work arrangements for new mothers.
• Organized various interest group activities and gatherings for employees.

Governance Achievements

• Established an anti-corruption policy with annual training for all employees.
• Required distributors and suppliers to sign anti-bribery sub-agreements.
• Implemented whistleblowing procedures.

Climate Goals & Targets

Environmental Challenges

• Unprecedented sales drop and financial loss due to prolonged pandemic and COVID-19 control restrictions.
• Intense competition in the apparel industry.
• Negative macroeconomic changes and slower consumer spending.
• Supply chain disruptions.
• Financial difficulties of some distributors.
• Potential reputational risks.

Mitigation Strategies

• Actively controlling operating costs and inventory levels.
• Maintaining healthier cash flow and liquidity.
• Cutting back purchase orders, laying off employees, stopping new hirings, and negotiating discounts from suppliers.
• Working with distributors to close some physical retail stores.
• Holding up investment projects.
• Reducing marketing and promotion budgets.
• Improving R&D and supply chain management.
• Streamlining the retail network and investing in new retail channels.
• Investing in new fashion brands targeting younger customer groups.
• Continuously investing in IT and ERP systems.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Careful selection of suppliers based on assessment criteria (track record, experience, financial strength, reputation, quality control).

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather conditions (heatwave, rainstorm, flooding)

Transition Risks

• Changes in environmental-related regulations

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Appendix 27 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Post-pandemic spending boom did not sustain to the second half of 2023. Economic recovery was stalling and consumer confidence was severely affected with the negative wealth effect from a steeper drop in real estate market. Consumption for discretionary items and mid-end fashion products were affected particularly hard.
• Intense competition among fashion brands.
• Disruptions to business activities, manufacturing, and logistics due to events like the COVID-19 outbreak.
• Supply chain disruptions due to dependence on independent manufacturers.

Mitigation Strategies

• Cautious approach to expanding physical stores and investment decisions, focusing on second and third-tier cities.
• Enhancing supply chain efficiency to minimize production costs and lead time.
• Adjusting pricing strategies to reduce markup multiples and focus on enhancing product value for money and brand building.
• Allocating more resources to livestreaming e-commerce and collaborating with KOLs/influencers.

Supply Chain Management

Responsible Procurement

• Careful selection of suppliers based on criteria including track record, experience, financial strength, reputation, ability to produce high-quality products, and quality control effectiveness.
• Requirement for suppliers to comply with the anti-bribery policy.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather conditions