Kappa'S Net Profit In China Fell By 25% In The First Half Of The Year

Main products of Kappa brand Clothing retail Business China Trends yesterday released its first half results report. The data shows that the company's revenue in the first half of the year was 832 million yuan, down 29.4% from 1.179 billion yuan in the same period last year; The net profit was 97 million yuan, down 56.9% from 225 million yuan in the same period last year. Its operating profit was only 53 million yuan, down 80.9% from 277 million yuan a year earlier. Despite the sharp decline in performance, the company said that the current financial situation is still relatively stable. On June 30, 2012, the company held cash and bank financial products totaling 4.8 billion yuan, and no bank loans.

Since the second half of last year, sports brands clothing The high inventory of enterprises has become a major problem. Enterprises are clearing up inventory on the one hand and reducing stores on the other. According to the semi annual report of China Trends, the total number of overall stores of Kappa brand in the first half of the year decreased from 3119 at the end of last year to 2550 now, a decrease of 569, or 18.2%. On the other hand, the company also changed the previous sales model, increased the proportion of spot sales, and reduced the ordering target of distributors, so as to reduce the inventory pressure of distributors and optimize the inventory structure.

The main business of China Trends is concentrated in China and Japan. The financial report shows that the business in China has declined in an all-round way, while the business in Japan has maintained growth. According to the analysis of financial report, the overall decline of business in China is due to, on the one hand, the downturn in the market and the lowering of the dealer's order target, resulting in a decrease in the number of sales, on the other hand, the reduction of sales discounts for out of season products and the adjustment of the dealer's supply policy to speed up the inventory clearance.

Among them, the main business of the China branch is focused on the Kappa brand. In the first half of the year, the channel revenue was 600 million yuan, a sharp drop of 38.7% compared with 979 million yuan in the same period last year. Among them, the clothing business revenue was 394 million yuan, down 43.1% from 693 million yuan in the same period last year. The average selling price was 112 yuan, down 17% year on year. The number of pieces sold was 3.673 million, down 43.3% year on year; The footwear business revenue was 185 million yuan, down 25.1% from 247 million yuan in the same period last year. The average revenue was 166 yuan, down 8.3% year on year. The number of shoes sold was 1.184 million pairs, down 31.9% year on year; The revenue of accessories was 21 million yuan, down 46.2% year on year.

The main business of the Japanese branch is divided into Kappa brand and Phoenix brand. The revenue of the two businesses in the first half of the year was 218 million yuan, up 15.3% from 189 million yuan in the same period last year. In the first half of the year, Kappa's business income was 117 million yuan, up 6.4% year on year; The revenue of Phoenix brand business was 101 million yuan, up 27.8% year on year.

Although the company increased its efforts to clear inventory in the first half of the year, as of June 30, 2012, the company's inventory still stood at 359 million yuan, only a small decline of 11% compared with 404 million yuan at the end of last year.

China Trends said it would continue to optimize in the second half of the year distribution channel And focus on comprehensively promoting the business model of "brand+retail"; Second, we will also plan to make a new attempt to start the "Dongxiang Store", which specializes in selling the products of several brands under the Group, including Kappa, Robe Di Kappa, Phoenix, X-nix and inhabitant, and mix and match different styles through brand differentiation and combination., Strengthen the popularity of the Group's brands, and cultivate new business of China Trends with low investment and risk. In addition, the company will continue to promote the Kappa children's wear and Kappa glasses business carried out through franchise in the first half of the year.