BELLE'S Annual Store Increased By 10%

China's largest women's shoe retailer BELLE (1880.HK) grew against the market in the first half of the year. Its revenue and net profit increased by 15% and 12% respectively, while gross margins remained at 57%. In the second quarter, the same store sales growth returned to 10.5%.

The chief executive, Sheng Bai Chai, said in his performance conference in Hongkong today that his discount sales pressure was small and maintained throughout the year.

10% and the same year the same store sales growth unit number guidelines remain unchanged.

In view of Jingdong and other electricity providers "pinch rack", Sheng Bai Jiao believes that the shoe and clothing market will not encounter the situation of fighting between businesses, emphasizing that BELLE's electricity supplier branch does not scale the assessment index.

No promotion pressure

BELLE is Hongkong's Hang Seng Index constituent stock (commonly known as "blue chips") with a market value of more than HK $125 billion.

Its business is mainly divided into fashion shoes and sportswear, which accounted for 64% and 36% in the first half of the year.

Fashion shoes have 10 private brands, including Belle, Teenmix, Tata, Staccato, Millie "s", "Joy &Peace" and so on. They adopt a vertically integrated business mode from R & D, manufacturing to retail.

Sports brand is the role of agent distributor, and the income from Nike and Adidas account for 85%.

Net profit in the first half was 2 billion 242 million yuan, an annual increase of 12%.

Gross profit margin was 56.6%, down 0.4 percentage points from the same period last year.

Early market worried that the discount of footwear brand competition, or will cause pressure on gross margins, chief executive Sheng Bai pepper refers to the existing inventory situation, discount sales pressure is not too great.

Turning to the sales situation in the second half of the year, he did not say optimistically: "we do not have the pressure of promotion, but it is possible that in the second half of the year, when the consumption is not too active, department stores will increase the intensity of discount, and the pressure on gross margins will have some effect on BELLE."

BELLE has nearly 16000 self operated retail outlets in the mainland, including 752 new shoe stores in the first half and 262 new outlets for sportswear.

Sheng Bai Jiao disclosed that footwear shops generally could achieve profits within one year, while the new shops in sports shops would be profitable longer than footwear shops.

In the first quarter of this year, affected by the severe cold weather, BELLE's same store sales growth dropped to 2.8%. In March, BELLE management gave a guide to the growth of unit number this year when it opened a press conference in Hongkong.

Sales growth in the same quarter rose to 10.5% in the two quarter, while Sheng Bai pepper still maintained the guideline of "the highest number of units per unit in the whole year" (that is 5% to 9%). He admitted that the wind and rain were frequent in recent years, but the sales in the three quarter were not as good as that in the two quarter, but it was expected in the four quarter.

Besides fashion

In addition to its business, another key business of BELLE is the international brand sportswear agent. In the first half of the year, it recorded a 5 billion 780 million income and a gross margin of about 37%, which is half of the gross price of women's shoes.

In March, he bought a competitor from a sports dealer for 880 million. Sheng Bai Jiao pointed out that this would complement the market orientation and increase the distribution outlets in Southern China.

But he admits that there is not much opportunity for mergers and acquisitions in the market. "We will not only share the advantages and disadvantages in order to expand the scale," he said.

Do not participate in electricity supplier pinch

BELLE invested in B2C purchase network in July 2011, and also has 5 official flagship stores on Taobao Tmall.

In view of recent Jingdong, Suning and other "competition" behavior, Sheng Bai pepper refers to "nothing to do with us". I believe there will be no fighting between businessmen in the shoe and clothing market.

He told the reporter that there was misunderstanding in the competition of the electricity supplier. He thought that he could defeat his opponent in a big scale.

Sheng Bai Zhi Zhi

The electricity supplier is not based on the scale, but the online and offline competency assessment standards are different, but they refuse to disclose specific assessment indicators.

In the performance report, Sheng Bajiao refers to the impact of online shopping on traditional retail, but the demand for retail channels represented by department stores is still strong in small and medium-sized cities, and there is still room for expansion in the long run.