(Yicai Global) July 15 -- Earnings plunged at many large Chinese casualwear brands in the first half due to the resurgence of Covid-19 in China. Metersbonwe Fashion & Accessories, one of the country’s largest, is expecting to have sunk further into the red.

Metersbonwe’s net loss in the six months ended June 30 was likely in excess of CNY600 million (USD88 million), the Shanghai-based company announced late yesterday. Its year-earlier loss was CNY39 million.

The firm’s Shenzhen-listed shares [SHE: 002269] plunged 8.2 percent today to close at CNY1.69 (25 US cents), brining the stock’s decline to 35 percent to date this year.

Metersbonwe closed brick-and-mortar shops in the period, including its flagship store on Shanghai’s Nanjing East Road, which weighed on earnings and drove up costs. In addition, its logistics center in the city’s Pudong area could not deliver goods normally for about two months because of Covid-19 restrictions, which also hit the firm’s bottom line.

But Metersbonwe was not the only fashion retailer to see earnings suffer. Net profit at Peacebird Fashion plunged 98 percent to just CNY5 million (USD739,000) in the first half from a year ago, according to its recent financial disclosure. The decline was due to the impact of Covid-19 outbreaks, as well as high fixed costs for store rents and salaries, the Ningbo-based fir, said.

Semir Garment, a leading casualwear producer, expects its first-half net profit to have slumped over 80 percent from a year earlier. The Wenzhou-based company said rising raw material prices had also impacted the earnings results.

Explaining the situation, Guosheng Securities analyst Ju Xinghai pointed out that popular apparel brands have a wide range of customers with low loyalty, and their sales rely relatively more on mass consumerism.

The brands have been stymied by Covid-19 restrictions since March. Ju predicted that with recent outbreaks under better control and footfall recovering, the situation will improve. But medium-term growth momentum has yet to be restored, as the pandemic is weighing on consumer confidence, he noted.

Editors: Shi Yi, Peter Thomas