China Dongxiang, which owns Phenix and the rights to the Kappa brand name for China and Macau, is warning investors that the results for the first half ended June 30 may show a 45 percent decline in its turnover. They would thus reach a level equivalent to about 1,489 million renminbi (€162.8m-$230.0m). Net profit may slide to 17 percent of sales from 35 percent in the corresponding period of last year. The backlog of orders for the second half is off by 40 percent. Citing very competitive market conditions and bulging inventories in China, the company said it had decided to make a one-time voluntary offer to its distributors to repurchase their slow-moving inventory at the original cost, while agreeing with them on rebates and other incentives based on key performance targets for each retail outlet.

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