"Looking ahead, we remain steadfast in our strategy of lowering costs and improving efficiency in order to stay competitive in the apparel and accessories retail industry. With the formation of our new joint venture Giosis Mecoxlane, we will refocus on our core strength of providing fashionable, value-for-money branded apparel, as well as health and beauty and other products, to consumers across China. We will also continue to pursue multiple retail channels to increase sales, while also selling through the new M18.com website, redesigned as a brand-neutral online marketplace and operated by our joint venture. Although we expect this transitional period to present short-term challenges, we are confident our strategic refocusing will ultimately enhance Mecox Lane's brand recognition and deliver value to our shareholders."

Fourth Quarter 201 2 Results

Due to the seasonal nature of its business, the Company presents its financial results on a year-over-year basis between the fourth quarter of 2012 and the fourth quarter of 2011, as in the following paragraphs.

Total Net Revenues

Total net revenues were $39.7 million in the fourth quarter of 2012, representing a decrease of 31.5% from $58.0 million in the fourth quarter of 2011.The decrease was primarily due to the decrease in net revenues from the Company's Internet platform, as well as the decrease in net revenues from the Company's directly operated and franchised stores.

Internet Platform

Net revenues from the Company's Internet platform were $17.9 million in the fourth quarter of 2012, representing a decrease of 39.1% from $29.4 million in the fourth quarter of 2011. The decrease was primarily attributed to a 36.6% decrease in the number of average monthly unique visitors as a result of the Company's decision to limit its online advertising.

Call Center

Net revenues from the call center were $14.5 million in the fourth quarter of 2012, representing a slight increase of 0.3% from $14.5 million in the fourth quarter of 2011.

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