XTEP International: 2019 Revenue Break 8 Billion Mark, Multi Brand Strategy Shape

Recently, XTEP international officially disclosed its annual performance for 2019. The report points out that in 2019, the company achieved a revenue of 8 billion 183 million yuan, an increase of 28% over the same period last year, and a profit of 728 million yuan for equity holders, an increase of 11%.

For the growth of performance, XTEP International said in its announcement that sales of clothing products were strong. Thanks to the upgrading of products and the vigorous development of the consumer market in the sporting goods industry in mainland China, XTEP's main brand revenue increased by 20.7% to 7 billion 710 million yuan, with a gross margin of 43.4%. In addition, the brand of fashion sports purchased in 2019 contributed 465 million yuan. Under the synergy effect, XTEP's international reporting period continued to grow, with revenue exceeding 8 billion yuan mark, a record high of nearly five years.

Ding Shuibo, chairman and chief executive officer of XTEP International Holdings Limited, said after the annual report that the past year marked the milestone of XTEP, XTEP transformed from local brand into global sporting goods company. XTEP has been committed to restructuring the company, from brands and products to XTEP adults and XTEP children (demand area: 80-150 square meters, 129 shopping centers). The strategic transformation of supply chain and distribution, "we are now in a better position than before."

In 2019, XTEP International announced the launch of a multi brand strategy. In March 2019, XTEP international and Wolverine set up a joint venture for the American sports brand Suo Conni and Mai le. In August, XTEP international completed the acquisition of the Swiss sports brand guise Wei and the French movement brand Paladin.

At this point, XTEP International's multi brand strategy system has taken shape. XTEP's main brand has ploughed the mass movement, and San Kang and Mai le are mainly professional sports.

By the end of 2019, XTEP's main brand had 6379 physical stores worldwide, and 90% of XTEP stores had been converted into international sports style layout. At present, the proportion of mass sports revenue based on XTEP is 94.2%, the proportion of fashion sports is 5.7%, and professional sports account for 0.1%.

For the multi brand strategy, Ding Shuibo said, "XTEP's main brand continues to grow steadily as the group's steady growth power. In the future, it will strive to realize the potential of five brands in the product portfolio, and formulate and implement the group strategy strictly, so that XTEP can achieve considerable long-term returns."

In addition, the annual report shows that in 2019, XTEP international electricity business accounted for more than 20% of the total sales. XTEP International believes that its electricity business is still in its infancy, so in the second half of 2019 to start an e-commerce business restructuring plan to integrate its supply chain operations and offline businesses to enhance efficiency. XTEP international forecast restructuring plan will enable XTEP to further achieve long-term quality growth in the second half of 2020 and beyond.

The performance of XTEP children is also mentioned in the annual report. The strong retail sales growth during the year owes to the improvement of product design and quality after the successful reorganization from 2015 to 2017. In view of the decentralization of the retail market in mainland China, XTEP international will remain cautious about the development of XTEP's children business in 2020.

In 2019, XTEP international continued to work in the field of running, sponsoring the marathon race to 53 matches, and continued to win the top of the domestic sports brand. The total number of participants was over 800 thousand. Through continuous marketing input, XTEP links up with a wide range of target consumers including professional runners, young athletes and the mass market.

At the same time, XTEP formally entered the basketball market in 2019 as an opportunity to sign Jeremy Lin. XTEP launched the basketball Product Co creation plan and developed a professional basketball product line, which received a good market reaction.

Looking ahead, XTEP International said it will continue to enhance our brand and product innovation through influential spokesmen and cross-border cooperation to consolidate our priority position, transform our shops to maximize customer experience and conversion rate, and expand global business to expand the income base, thereby increasing XTEP's organic growth.

The annual report also revealed the recent development plan of the acquisition brand: XTEP international will continue to expand Paladin's business in the Asia Pacific region, increase investment in apparel product lines, further enhance its brand awareness and market share, transform the brand name from the brand, product mix and design and retail network, and the store with new marketing activities and products will be 2021 The new store is expected to open in the second half of 2020; the flagship store of Tmall will open in March 2020, and its first line store will open in the second half of 2020.