Consumer China

Lilang – the look for middle-aged men in lower-tier cities

  • Published 03 Nov 2011

Robust profit margins and strong sales underpin Lilang’s performance, but the launch of ‘L2’, a higher-end brand, has met a lukewarm reception.

The low-end menswear company, Lilang (1234:HKG), has expanded rapidly thanks to its wholesale distribution model and extensive marketing in 2010. The lack of self-operated stores has also helped it maintain robust operating margins at 26%. However, attempts to launch a higher-end brand 'L2' in 2010 have been met with limited success and saw flat sales growth in 1H11. Even so, we expect robust sales of the group's mainstay brand 'Lilanz' to support revenue growth of 30% this year, following strong orders at its autumn and winter sales fairs earlier in the year. However, L2's future remains uncertain.

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