One of China's largest specialist consumer electronics retailer chains saw sales fall almost 20 per cent in the first quarter of the year, according to company data.
Sales at China 3C Group reached $84.5m for the three months to March 2008, a decrease of 19.4 per cent over the same period one year earlier.
The shortfall was "primarily attributable to supply chain disruptions from winter storms that impacted the company's ability to replenish product at its retail outlets, and increased competition", the company said.
Severe winter weather and associated power failures crippled transportation networks across much of south and east China for several weeks earlier this year.
Profits at China 3C also fell, in line with the reduced revenue. The company reported net income of $5.8m.
China 3C also saw inventory almost double to $11m during the quarter as the weather hindered efforts to move products into stores, and reduced customer throughput.
"We were pleased to maintain Q1 general and administrative expenses as a percentage of revenue on the same level as a year ago," said Zhenggang Wang, chairman and chief executive at China 3C.
"This is a result of our strategy for 2008 of improving efficiency and profitability per store as opposed to pursuing rapid expansion as we have in the past."
China 3C intends to increase margins with new leasing and maintenance services, Wang said, and to begin buying and selling second-hand products.
The group is also seeking acquisitions for additional growth. "We believe there are smaller competitors that face increased operating difficulties in the Chinese market," said Wang.
"We intend to use our strong cash position to pursue an acquisition at an attractive valuation in the near future."
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