Semir Shares Fall 1% As Another Big Chinese Fashion Retailer Reports Earnings Drop

Shares in Shenzhen-listed Zhejiang Semir Garment, one of China’s largest home-grown fashion retailers,  fell 1% at the Shenzhen Stock Exchange yesterday after the company said its net profit in the three months to September plunged by 39%.

Semir said yesterday it made $36 million in the third quarter, on sales that slid 5.5% to $75 million. Earnings were off due to intense competition, high inventory levels, and spending on new products,  among other factors, the company said.

The fall is the latest sign of trouble in the country’s retail industry amid slowing economic growth that was also evidenced on the 2012 Forbes China Rich List announced earlier this month.

On Friday, Shenzhen-shares in Shanghai Metersbonwe Fashion and Accessories, another Chinese fashion retail giant, dropped 9.8% at the Shenzhen Stock Exchange after the company posted a double-digit drop in third-quarter earnings.

Semir’s chairman Qiu Guanghe, together with his family, ranked No. 37 on the 2012 Forbes China Rich list with wealth of $1.95 billion. Metersbonwe’s chairman Zhou Chengjian ranked No.19 on the same list with wealth of $2.7 billion.

Even as business has become more difficult in China’s retail industry this year, foreign companies facing larger problems at home are looking to expand in China.  Laura Ashley of London is in talks with a potential partner in China to open its home furnishing and fashion stores in the country as soon as “possibly by the first quarter of next year,” business development manager Kai Xiang Teo said on the sidelines of the Forbes Global CEO Conference in Dubai  last week.

The Gap, Calvin Klein, Iconix  and Wal-Mart are among the U.S. businesses targeting China for retail business growth.