Baili Material Shoes Business Improvement In The Second Quarter Only The Decline Is Irreversible

Sheng Baijiao, chief executive of Baili International Holding Co., Ltd., China's largest shoe retailer, said in an interview after the shareholders' meeting on Tuesday that the group was in the process of orderly transformation and expected the footwear business performance to improve in the second quarter compared with the first quarter. 　　

At the annual report press conference at the end of May, for the first time in nine years since Baili was listed, it was recorded that profit After retrogression, Sheng Baijiao confessed that he felt guilty, and said that the group would die if it did not transform, and that the transformation would face great risks and accelerate the decline of performance, which made the retail market in an uproar. Because, as the largest shoe enterprise, Belle has always been a double barometer of China's economy and retail industry.

Deutsche Bank AG (dbk. De), Credit Suisse Group AG (vtx: CSGN) , Credit Suisse Group AG (vtx: CSGN) , JPMorgan Chase & Co. (NYSE: JPM) JPMorgan Chase & Co. (NYSE: JPM) , respectively, maintained their inherent ratings of "buy", "sell" and "neutral" after the group's annual report, with the target prices of HK $6.49, HK $3.5 and HK $4.5 unchanged. Morgan Stanley (NYSE: ms) Morgan Stanley lowered the target price of Belle International from HK $6.1 to HK $5.3.

Although Sheng Baijiao said, Baili group shoes business improved in the second quarter, but the same store sale The decline cannot be reversed.

According to the website, for the three months ended May 31, Belle International, the mainland of China shoes The same store sales of similar businesses decreased by 16.0% year-on-year, and the decline has exceeded 10% for three consecutive quarters. At the same time, the growth of sports and clothing business continued to slow down. During the period, domestic sales in the same store only increased by 5.5%, compared with the growth rate of 6.0% in the previous three quarters.

Sheng Baijiao pointed out that the double-digit decline in footwear business in the first quarter was partly due to weather factors, which will be improved in the second quarter, while the sportswear business also recorded expected growth in the second quarter. At the same time, he said, China's overall consumption growth is clear, but the consumption structure has changed greatly. However, the development of the department store industry is worse than that of two or three years ago. Brands can no longer develop in a single direction. The pursuit of single market maximization requires brand transformation. He reiterated that "no transformation is not possible" and will carry out transformation work in an orderly manner.

about Baili group Sheng Baijiao said it was going on in an orderly manner and hoped to complete it before retirement. The transformation includes sorting out the store structure, re examining the number and location of stores, including closing stores with poor profitability.

According to the website data, as of the end of the first quarter on May 31, Belle group had 20876 direct retail stores in mainland China, including 13655 footwear stores and 7221 sports and clothing stores, a net decrease of 107 and a net increase of 110 compared with February 29.

When it comes to the Hong Kong market, Sheng Baijiao is more pessimistic, saying that the continuous decrease of tourists will affect the business environment, and the fixed expenses such as rent cost are much higher than those in the mainland market. Therefore, sales have a greater impact on profits. Compared with the impact of "occupying the middle" in 2014, the decline of tourists in 2015 has a greater impact.

Shares of Belle International Holdings Ltd. rose 1.522% to HK $4.670 on Tuesday, having fallen more than 17% so far this year and more than 43% in the past year.