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Winner Medical Reports Third Quarter Fiscal 2012 Results
Date:8/9/2012

anded retail stores, with 18 in Guangdong province, 10 in Beijing, 8 in Shanghai, 2 in Hong Kong and 10 in PRC second-tier cities, such as Changsha, Wuhan, Xiamen, Shenyang, Tianjin and Chengdu, after having recently opened 3 new stores in Beijing and 1 new store in each of Wuhan, Chengdu and Shenyang. From May 10, 2012 to August 9, 2012, 1 store in Hong Kong and 1 in Shanghai were closed due to low traffic or expiration of lease agreements. Both stores were opened in the initial stage of operating the retail business and management does not consider their closures to significantly impact the Company's retail expansion plans.

Since launching the customer loyalty membership program in the Company's chain stores in November 2010, approximately 65,000 members have been recorded as of August 9, 2012, compared with approximately 50,000 members as of  May 10, 2012. The repurchase rate by members is approximately 70%.

The Company established Shenzhen PurCotton E-Commerce Co., Ltd. ("PurCotton E-Commerce") in November 2011 with two non-affiliated individuals who are experts in e-commerce in order to oversee the operation of its online sales. At the time of establishment, the Company owned 70% of the equity interests in this operating company, with the other 30% being owned by the two individuals. However, in April 2012, the three parties mutually agreed to cease the partnership in PurCotton E-Commerce. The two individuals had withdrawn their initial capital by April 2012. The Company is in the process of updating the business registration of PurCotton E-Commerce with the local government and expects to complete that process in the fourth quarter of 2012.

In addition, the Company has launched its PurCotton retail products into new distribution channels. As of August 9, 2012 the Company sells eight separate stock keeping units (or "SKUs") of PurCotton sanitary napkins to a network of more than 1,000 stores in approximately 12 cities. It is expected
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SOURCE Winner Medical Group Inc.
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