Four Quarter Retail Sales Low Double-Digit Growth

In January 14th, 31st degree announced that the retail sales of 31st degree main brand products in the fourth quarter of 2018 (at retail value) were flat compared with the same period in 2017.

The retail sales of 360 children's brand products in the fourth quarter of 2018 (at retail value) were lower than those in the same period in 2017.

Although the group is still growing, the growth rate has slowed down significantly.

Looking back at the 31st degree group earnings report, we found that in 2016, the group's operating income was 5 billion 23 million yuan, up 12.65% from the same period last year, and the gross profit grew 15.74% to 2 billion 110 million yuan over the same period.

In 2017, the group's operating income was 5 billion 158 million yuan, up 2.7% from the same period last year, and gross profit rose 2.2% to 2 billion 156 million yuan over the same period last year.

It is noteworthy that the downturn in the main brand clothing business has also forced 360 degrees to start remining the potential of children's clothing business.

Previously, the group has been engaged in children's wear business for more than nine years, and its product positioning is mainly sports leisure and non sports.

The 31st degree children's clothing is also the first project of capital operation after the 31st degree group went public in 2009. The 31st degree group will use 9% of the proceeds raised for the research and development of children's clothing brand.

In November 2018, in order to promote the further development of children's wear business, it was decided to pfer children's clothing business to 361 degrees in Zhuji, and Zhuji city will become the holding company of children's clothing business of 331 degree group at 361 degrees.

In fiscal year 2016 and fiscal year 2017, the profits of children's clothing brands before tax were 195 million yuan and 169 million yuan respectively.

With the decline in pre tax profits, the 31st degree children's clothing has also been closed frequently in recent years.

Data show that in 2015, there were 2350 sales outlets for children's clothing.

In 2016, the sale of children's clothing was reduced to 2000.

In 2017, the sale point of children's clothing was reduced to 1797 again, of which 617 were located in authorized retail outlets of the core brand of 331 degrees.