Vancl rejects rumors of 25% staff cut (2)

However, the company has witnessed a surge in inventory and costs due to excessive investment in logistics and overexpansion of product categories since 2010, Fan Jie, an industry analyst from Adfaith Management Consulting, told the Global Times Monday.

He added that Vancl intended to transform from an independent, single-brand B2C e-commerce operator into an integrated e-commerce platform selling multiple brands and product categories.

By the end of September 2011, Vancl's total inventory had reached 1.45 billion yuan ($233 million), compared to 850 million yuan by the end of June 2011, the 21st Century Business Review reported in January.

Vancl also struggled in establishing its own delivery company, making a 50 percent layoff and a cut in delivery coverage to six cities from 26 August 2012, said Fan.

Chen Nian, CEO of Vancl, speaking at the 7th China Online Retail Annual Meeting on Friday, said that inventory is still a big concern for the company, as it is for the whole domestic apparel sector amid a sluggish economy.

China's major sportswear brands, such as Xstep, Peak and Li Ning, all suffered declines in new orders for the first half of 2013.

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