Optimize Kappa Retail Network Effectiveness China Trend In Mid 2019 Net Profit Increased By 36%

In November 27th, the Kappa parent company China released the interim results for the 6 months ended September 30, 2019. China realized 899 million yuan in revenue, an increase of 14.2% over the same period last year, a gross profit of 561 million yuan, an increase of 23.8% over the same period last year, and a net profit of 188 million yuan for the company's equity holders, an increase of 36.2% over the same period last year.

As for the growth of performance, China's trend indicated in the announcement that the group continued to optimize the distribution of retail network and enhance the efficiency of the store through the brand led business mode. Through the optimization and reform of the channel, the work effect is gradually emerging, the shopping center channel growth is strong, and the store structure has been improved continuously under the overall line.

China's trend indicated that after 12 months, the outlets grew steadily and the overall performance increased. However, the Kappa inventory will increase in the short term due to the change of sales mode, but the group will continue to optimize the retail network distribution to enhance the efficiency of the store, and it is expected that the inventory level will further decline in the future.

In addition, in the channel of e-commerce, in order to attract more customers, China's trend is not only to actively participate in the promotion activities of well-known e-commerce platforms in major seasons, but also to develop more product lines, enrich the categories of e-commerce products, and intensify the promotion of new online platforms, thus promoting the integration of online and offline businesses. Statistics show that during the period, the customers of the Kappa brand e-commerce group increased 16 percentage points to 50% of the 18-24 year old customers.

It is noteworthy that the growth momentum of Kappa shouldering heavy responsibilities is mainly from the promotion of self employment ratio. At present, the total number of Kappa brand shops is 1461 (including 285 children's stores in Kappa), and the number of self operated shops operated by self operated retail subsidiaries has reached 377.

According to the latest data, the sales volume of China's Kappa brand non self operated channel business is 236 million yuan, which is increased by 13 million yuan compared with the sales volume of non proprietary business in the past period, and the non proprietary business accounts for 35.7% of the Kappa sales in China's region. The sales volume of the non self operated business is 35.7% yuan. Self channel business sales reached 425 million yuan, compared with the past period of self channel business sales of 326 million yuan, an increase of 99 million yuan, self business accounted for Kappa sales in China's percentage of sales reached 64.3%.

At present, Kappa's distribution network covers all major capital cities in China and other major large cities and towns. In the first half of 2019, Kappa children's clothing business continued to complement and promote each other through brand activities and promotion of terminal stores, further strengthening the competitiveness of children's wear market. During the reporting period, children's clothing business income amounted to 52 million yuan, accounting for 6.9% of China's income.

At the same time, this year is Kappa Omini logo 50th anniversary, Kappa brand in May held Kappa History Book world first event. In the first half of 2019, Kappa brand continued to use the online and offline full coverage of integrated marketing promotion strategy, through cross-border cooperation with celebrities in entertainment, music, art and other fields, to increase brand penetration, and through entertainment marketing and sponsorship of various sports events, increased the exposure rate of Kappa brand and products, and increased the brand equity of KOL.

According to the plan, the next step is that China's trend will continue to close down the inefficient shops of Kappa, and innovate and upgrade the products in the light of the trend of the market, grasp the good opportunities of sports industry, make rational use of resources, and expand the channels of Kappa brand publicity and promotion.