The Across-the-Board Launch of La Chapelle’s Partnership Incentive Programme

HONG KONG, Jan. 15, 2015 /PRNewswire/ — Shanghai La Chapelle Fashion Co., Ltd. ("La Chapelle" or the "Company", stock code: 6116.HK), one of the largest fashion apparel companies in the Chinese mainland, today announced its across-the-board launch of the Partnership Incentive Programme, aiming to drive employees’ motivation and boost sales.

La Chapelle’s partnership incentive programme treats every sales staff as a "store partner" and allows sales staff to share corporate profit based on the store’s sales. Under the programme, the salary will be "directly linked to sales performance" instead of the previous "fixed salary + bonus". A percentage of the store’s annual sales, which is set by the Company based on the store’s sales record, will be reserved as the total annual salary package to be shared among all staff working at the store. In addition, in order to encourage the stores to achieve better sales than the Company’s annual sales target, the store managers are given the right to determine headcount and work shift according to market changes. Each store has become an autonomous management and operation center to maximize operational efficiency.

The Company has implemented the partnership incentive programme in over 300 existing stores nationwide since December last year. During the trial operation period, it was found that the sales staffs are highly motivated and work closely to drive sales, setting new sales records time after time. According to the latest statistics of the Company, a majority of the trial stores have achieved YoY growth in three metrics: sales, total salary as a percentage of store’s sales and average salary. The Company is planning to implement the programme in all of its stores, and at the same time evaluate the actual implementation performance to further improve and enhance the programme.

Mr. Wang Yong, Executive Vice President of La Chapelle, said, "As a leading multi-brand fashion group in China, La Chapelle is committed to innovation and prompt response to market changes. The main purpose of the partnership incentive programme is to make our employees realize that they are the real masters of our enterprise, so as to enhance their sense of belonging, motivation, creativity and responsibility toward the Company. The programme solves a number of bottleneck problems in corporate management, for example lowering employee turnover rate, shortening inventory turnover and improving customer service quality. It enhances operational efficiency to serve new customer group and improves customer satisfaction, which are crucial for improving our overall sales performance."

About Shanghai La Chapelle Fashion Co. Ltd.

Founded in 2001, Shanghai La Chapelle Fashion Co. Ltd. is a fast-growing multi-brand fashion group in the PRC, which designs, markets and sells apparel products with a focus on mass-market ladies’ casualwear. The Group strives to offer customers the latest fashions at competitive prices through a wide range of apparel products under 8 brands, namely La Chapelle, La Chapelle Sport, 7.Modifier, Candie’s, La Chapelle Homme, La Babite, La Chapelle Kids and Pote. The Group directly controls and operates 100% of its nationwide sales network. As at 30 June 2014, the Group’s extensive nationwide retail network comprised 5,671 retail points located in approximately 1,900 physical locations, comprising mainly department stores and shopping malls, in cities across all 31 provinces, autonomous regions and municipalities in the PRC. In August 2014, the Group launched its O2O strategy to integrate traditional physical stores with online channels.