If It Weren'T For Nike, BELLE Would Be Even Worse.

As China's largest

The Belle International Holdings Limtied. (1880.HK), known as the "shoe king", is relying on its sideline industry as the largest agent of Nike Nike brand in China's slow economic growth and weak consumer sentiment. The Belle International Holdings Ltd has barely maintained its medium-term revenue and earnings growth.

After Monday, BelleLtd. BELLE group announced the interim results as of August 31, 2015. In the first half of fiscal year 2015/2016, the company recorded an increase of 4.3%, from 18 billion 556 million 100 thousand yuan in the same period last year to 19 billion 359 million 600 thousand yuan, and net profit increased 3.86% to 2 billion 158 million 100 thousand yuan, compared with 2 billion 77 million 900 thousand yuan in the same period last year.

It is BelleLtd. BELLE group's weakness in the past two years. In the first half of fiscal year, the company's footwear business income fell 5%, from 10 billion 355 million yuan in the same period last year to 9 billion 835 million 700 thousand yuan, accounting for 50.8% than the equilibrium line.

The company said that the decline in sales was mainly due to the decline in the number of sales units in the same store. According to the data analysis, the sale of footwear business in the mainland of China in the first quarter and the two quarter decreased by 7.8% and 7.7% respectively. BelleLtd. BELLE group said that although the unit price slightly increased, it could not offset a significant decline in volume.

The decline in footwear sales also contributed to a 170 drop in the median profit margin to 19.3% in the medium term. BelleLtd. BELLE warned that if the footwear business could not be improved, the profit margin of the business would be further reduced.

Although the footwear industry and sports and clothing income are almost equal, but because footwear is mainly self owned brand, its Mao Liyuan is higher than sports and clothing business, so the profitability of footwear business will also greatly reduce the profitability of the company.

Compared with the weak footwear industry, BelleLtd. BELLE group relies on the status of Nike Nike brand, the largest agent in China, to maintain a rapid growth in sports and clothing categories.

As for the first half of August 31, 2015, the income of Belle and BELLE Apparel Group rose by 16.1% from 8 billion 200 million 100 thousand yuan in the same period last year to 9 billion 513 million 900 thousand yuan.

From the medium-term performance of BelleLtd. BELLE group, its private brand business recorded only 8 billion 761 million 700 thousand yuan in the first half of fiscal year, and once "shoe king" has been reduced to a real agent.

From the perspective of profitability and profitability, the group's footwear business has also become a drag on business.

In the first half of the fiscal year, the gross margin of footwear in BelleLtd. BELLE group fell 4.2% to 6 billion 715 million 900 thousand yuan, while gross profit in sports and clothing rose by 24% to 4 billion 260 million 300 thousand yuan. The gross profit margin of the two departments was 68.3% and 44.7% respectively in the medium term, up 60 basis points and a 280 basis points higher than the same period last year.

It is worth mentioning that the slight rise in the gross interest rate of the footwear business is the result of the company's collective choice to reduce sales promotion in view of weak consumption and weak passenger flow.

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It can be seen from the inventory cycle that the above two categories are quite different. As of the first half of August 31, 2015, the BelleLtd. footwear inventory cycle of BELLE group increased from 247.9 days in the same period last year to 247.9 days, while the sportswear business inventory cycle dropped from 106.4 days in the same period last year to 86.7 days.

In addition to the weakness of China's economy and consumption, consumers' participation in sports is also an important reason for the expansion of sports business.

In essence, nearly 10 international and domestic sports brands that have been in the doldrums have been recovering strongly after the Olympic Games in the past two years.

BelleLtd. BELLE group also responded to the closing of 424 stores in the first half of its earnings report, saying that it was subject to the prudent influence of department stores and outlets, but the group did not face the risk of large-scale closedown, but admitted that it would continue to shut down shops with poor prospects.

As of the first half of August 31, 2015, the operating profit of BelleLtd. BELLE group footwear business recorded 1 billion 899 million 700 thousand yuan, down 12.5% from 2 billion 170 million 800 thousand yuan in the same period last year, and the operating profit of sports and apparel business was recorded at 1 billion 1 million 400 thousand yuan, up 64.3% from 6.094 yuan a year earlier. The group's overall business profit was recorded at 2 billion 839 million 700 thousand yuan, 4% yuan over the same period last year, and the operating profit rate remained 14.7%. Net interest rate edged down by 10 basis points to 10.

BelleLtd. BELLE Group intends to send a medium-term interest rate of 0.16 yuan, up 6.7% from 0.15 yuan a year earlier. However, it sent a special dividend of 0.25 yuan in the same period last year, but this year there was no dividend, and the total dividend yield fell by 40% in real terms.

On Monday, BelleLtd. (1880.HK) BELLE international shares closed at HK $7.260, up 2.254%, and the stock has fallen nearly 17% so far this year.

Brand Observer: Mai Ke: facts prove that "if it is not for Nike, BELLE will be even worse" is not exaggerated.

In the shoe industry's flagging today, footwear sales can't be improved and profits are kept under pressure. This is not only the pain point of BELLE international, but also the biggest injury of the whole industry, especially the women's shoes industry.

And for Nike's "rescue", we must thank the movement's "love", the enthusiasm of consumers for the continuous improvement of sports participation, so that the shoe industry has a slim chance of survival.