"Shoe King" BELLE Participates In Sports Dress To Strive For New Development

For many consumers, especially female consumers, they are quite familiar with BELLE international.

The largest in the country.

Once monopolized the women's shoe counters of the major shopping malls, it occupied half of the consumer's shoe cabinet.

However, once known as "shoe king", BELLE international, which can open 8 stores a day on average, has to face the situation of direct sales decline, e-commerce impact and difficulties in business pformation.

But this is not a problem faced by the BELLE family.

The general dilemma.

BELLE footwear business continued to decline in same store sales

Although listed in Hongkong, BELLE's main business is still in China.

According to its 2015 China Daily, BELLE has a turnover of 19 billion 360 million yuan, of which mainland business accounts for 96.77% of its revenue, and its turnover is 18 billion 734 million. The income of Hongkong and Macao is only 486 million yuan, accounting for only.51%.

In addition to the self employment and agency business of footwear, another main business of BELLE is the agency sales campaign and clothing business. At present, its agency brand includes Nike, Adidas, PUMA, Converse, Mizuno and clothing brand MOUSSY and SLY.

BELLE's recent three quarter domestic retail operation data show that its footwear business is going from bad to worse, but its performance depends instead on the agency's sports brand.

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Data show that BELLE's footwear sales in the three quarter decreased by 10.4%, but the sales of sports and clothing business increased 6%.

This is already a continuous decline in its footwear business and same store sales, and the decline is expanding.

According to public information, BELLE international sales in the first three quarters of 2015 decreased by 7.8%, 7.7% and 10.4% respectively.

In response to this situation, BELLE is gradually reducing the number of footwear shops. In the first three quarters of this year, a total of 418 shoe shops were closed, but 367 sports and clothing stores were added. As of the end of November, there were 20506 retail outlets in the mainland, 13710 of which were footwear shops and 6796 were sports and clothing stores.

For BELLE's declining sales in the same store, brokerages are not optimistic, they have lowered the target price of BELLE, and think there is a downward risk.

Guotai Junan believes that the footwear business is still weak, and the catalyst is not available in the short term. The gross profit margin of the 2016 to 2018 fiscal year is expected to decline.

Nomura's analysis also points out that BELLE footwear business is facing multiple challenges such as price competition of online retailers and lack of flexibility of offline stores. It believes that it needs to close more shoe sales outlets to stabilize the sale of footwear businesses in the same store.

Bank of America Merrill Lynch and Credit Suisse agreed that the same store sales will continue to decline.

And the popularity of popular brands and the decline in department stores, the footwear industry is expected to remain a challenge in the next 1-2 years.

The disappointment was also directly reflected in the capital market. On the first two days of this week, BELLE's stock price fell 16%, and its market value evaporated nearly 3 billion 400 million Hong Kong dollars. On the 14 day, BELLE international even led the Hong Kong stock market. On the 15 day, BELLE's share price fell to HK $5.43, setting a new low for half a year in six years.

Sportswear business is not a life-saving straw.

Although the number of stores is only half of the footwear business, the importance of sports and clothing business in BELLE business plates is increasing.

According to its 2014 earnings report, as of February 28, 2015, BELLE footwear business revenue was 206 billion 578 million, up 1.5% from the same period last year, while sports and apparel business income was 16 billion 971 million yuan, up 17.2% over the same period last year.

By the end of the first half of August 31st, BELLE's sports, clothing business and footwear business were the same, with a median income of 9 billion 835 million 700 thousand yuan and 9 billion 513 million 900 thousand yuan respectively.

However, the hope of growth depends on sports and clothing business.

From this year's data, sports and clothing business are growing, but the growth rate is showing a downward trend.

According to the data released, sports and clothing sales grew by 12.4% in the first quarter, but dropped to 6.5% in the second quarter, and only 6% in the third quarter.

According to the insiders, at present, there are more and more Chinese dealers such as Nike, Adidas and other sports brands. The brand itself is also accelerating the layout of the direct store. The growth of agency brand performance can not fundamentally save the overall decline in the overall performance of the footwear business.

In addition, there is "Olympic risk" in the sports industry, that is, the rapid expansion before the Olympic Games, which has led to the performance difficulties in the post Olympic era, which has led to the huge losses of Puma, Lining and other brands.

With the coming of the new Olympic year, sports brands have issued stock early warning. Recently, Lululemon Athletica, a North American yoga clothing retailer, has announced that its stock growth rate is 71.9%, which is five times the sales increase of 14.4%.

Therefore, there is an analysis that BELLE's footwear business is hard to recover in the current economic environment and relies too much on sports and apparel business to support its performance. If the sports apparel industry is experiencing a slowdown or recession cycle, BELLE group may lose growth support.