Winner Medical is also selling its PurCotton® consumer products online via China's popular Taobao.com and the Company's self-owned Business-to-Consumer (B2C) online store. The Company also established Shenzhen PurCotton E-Commerce Co. Ltd. to better manage the Company's online distribution channels. Shenzhen PurCotton E-Commerce Co. Ltd. is 70% held by Winner Medical and 30% held by two individuals who are highly experienced in e-commerce.
The Company also recently started launching consumer products through distributors at mid- and high-end hypermarket, supermarkets and convenience stores in Beijing, Shanghai and Guangdong province in China. Going forward, the Company believes it can continue to cultivate distributors and online sales in order to grow sales, while selectively selling in chain stores to build brand awareness and expose potential customers to the Company's products.
Commodity DerivativesCotton is the Company's primary raw material used in its manufacturing process. As a result of rising demand caused by the global economic recovery and supply shortages due to bad weather, cotton prices have been rapidly increasing and fluctuating between January and March 2011. Under this rising cost environment, the Company cannot secure stable price quotes from cotton suppliers, resulting in inconsistency in the prices quoted to the Company's customers. Therefore, the Company, through its wholly-owned subsidiary Winner Industries (Shenzhen) Co., Ltd. ("Winner Shenzhen") has decided to enter into cotton future transactions in order to manage the impact of volatility in cotton prices on production.
During the second fiscal quarter ended March 31, 2011, Winner Shenzhen's transactions in cotton futures resulted in a net loss of approximately $1,577,000, which was charged to "realized loss on commodity financial instruments" in the condensed consolidated statements of inc
|SOURCE Winner Medical Group Inc.|
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