Casual clothing brand Giordano "The house leaks every night rain"

The well-known casual wear brand --- Giordano and Japan's casual clothes giant Uniqlo, after all, is "with no connection". Yesterday, UNIQLO’s parent company, Fast Retailing, announced that it had given up Giordano's (0709.HK) offer for a full offer. Giordano's early morning stock price dropped by a sudden 16%. At the close of the market, Giordano's share price still fell by 11.23%, closing at HK$4.03.

FastRetailing, which was listed on the Tokyo Stock Exchange, issued an announcement yesterday, saying that it decided to abandon its plan to purchase Giordano. The main reason was that Giordano’s performance in the first half of the year dropped by 25% year-on-year. FastRetailing believes that Giordano's current share price does not truly reflect the company's operating conditions and intrinsic value.

On August 25, Giordano issued a media report that made the market bearish on the market. As of the end of June, the company’s cash on hand and bank balances were only HK$678 million, but total liabilities were as high as HK$654 million. At the same time, Giordano’s gross profit margin dropped to 50.5% year-on-year in the first half of the year. During the reporting period, the company’s gross profit decreased by 6.8% to HK$1.021 billion.

With the rain leaking overnight, Giordano’s outbreak of global sales of five T-shirts broke out on September 4. It is understood that Giordano's production of Disney's Xiaofei Xiang children's clothing printed T-shirt was found to contain excessive chemical substances. Giordano Company has publicly stated that the five T-shirts produced by mainland suppliers that produce the T-shirts will also be suspended worldwide this week. It is reported that Giordano's five prototypes have been sent to relevant departments for testing, and results will be announced within a week.

UBS analysts said that the five kinds of T-shirts produced by Giordano may be harmful to children and it is expected that there will be limited impact on the company's profitability.

However, a Hong Kong stock market fund manager stated that Uniqlo had reservations about Giordano’s corporate governance, financial status and “Diaoxiang recall” incident and decided to abandon the acquisition. The fund manager said that UNIQLO does not care about spending more money to win Giordano in one fell swoop, but they are worried that after entering the Giordano, Giordano's current operations management and financial operations are difficult to merge and lead to the development of obstruction. UNIQLO from Japan is the seventh largest clothing chain in the world. Its parent company, Fast Retailing, is listed in Japan with a market value of more than HK$68 billion. Uniqlo wanted to bring Giordano into the bag at the beginning of August but was met with cold shoulders. Therefore, the group turned to the fund manager who holds Giordano shares.

On August 7, Giordano admitted that UNIQLO intends to acquire the news release. The stock surged 22% to a recent high of 4.95 Hong Kong dollars. Since then, the stock has been hovering in the range of 4.3 to 4.8 Hong Kong dollars until the announcement of abandonment of purchase by FastRetailing on Tuesday. Giordano's share price once fell by 16% and was low by 3.8 Hong Kong dollars. Giordano closed at HK$4.03 yesterday, down 11.23%.