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Monday 6 April 2009
Sportswear maker Xtep steps up its game
Terry Ho (left) and Ding Shuipo see further expansion for sportswear maker Xtep International Holdings ahead, but warn it will not be as much or as rapid as last year.
Beijing Olympics raises group’s profile while diversification and expansion of retail outlets give revenue a boost
Wilson Lau 6 April 2009
Mainland-based sportswear specialist Xtep International Holdings capitalised on the sports frenzy fuelled by the Beijing Olympics by aggressively expanding its retail sales network and increasing overall revenue by 110 per cent to 2.87 billion yuan (HK$3.25 billion) last year compared with 1.36 billion yuan for 2007.
The group, in partnership with its distributors and franchisees, increased the number of Xtep-brand retail outlets in the mainland to 5,056 in 2008, representing 15 per cent growth over the previous year.
The number of outlets selling products under the Koling and Disney Sport brands went up 78 per cent to 476.
Gross profit leapt 140.2 per cent to 1.06 billion yuan and gross profit margin increased 4.6 percentage points to 37.1 per cent over 2007.
Net profit jumped 130 per cent to 508 million yuan and net profit margin grew 1.4 percentage points to 17.7 per cent. Basic earnings per share reached 26 fen a 77.6 per cent increase.
The company recommended an 8 HK cents final dividend per share and a 5 HK cents special dividend per share, which represented a 68 per cent dividend payout ratio.
Xtep, listed on the Hong Kong stock exchange since last June, produces and markets footwear and apparel under its Xtep brand.
The company diversified its portfolio by establishing the Koling brand and obtaining the licence to the Disney Sport brand in 2007.
Products sold under the Xtep brand accounted for 91 per cent of the group’s total turnover. Revenue derived from sales of products of the other two brands and original equipment manufacturing operations accounted for the remainder.
Chairman and chief executive Ding Shuipo said although last year was full of challenges, the company achieved a sharp revenue increase because it launched products that met increasing consumer demand for a diverse range of sportswear products combining a high level of functionality and ultra-trendy designs.
Xtep has three in-house product design and two research and development teams employing more than 500 staff.
The company launched about 2,000 footwear designs, 2,600 apparel designs and 2,100 accessory designs last year.
Although Xtep’s retail outlets are spread throughout the mainland, the group strategically targeted the eastern and southern parts of China by opening 12 brand flagship stores mainly in these regions last year.
Mr. Ding said Xtep aimed to tap the fast growing wealth of residents in these regions which registered an average gross domestic product growth of more than 12 per cent, much higher than the national GDP growth of 9 per cent.
Mr. Ding also attributed the group’s strong performance to its distribution resources planning system which covered about 50 per cent of its distributors. “We held four quarterly sales fairs which gathered customers from all over China. By collecting customer feedback we keep ourselves abreast of the latest trends in individual markets.”
Xtep organised training sessions in first- and second-tier cities to improve the quality of service and update staff of retail outlets about the latest products. More than 2,000 people took part, Mr. Ding said.
Group chief financial officer Terry Ho Yui-pok said overall sales of Xtep brand products shot up 117.3 per cent to 2.6 billion yuan. Gross profit margin grew 2.2 percentage points to 36.7 per cent.
Xtep’s footwear revenue was up 84.8 per cent to 1.34 billion yuan, but share of footwear in the brand’s total revenue decreased to 51.4 per cent from 60.5 per cent in 2007 because the group aimed to balance its product mix by introducing more apparel and accessories, Mr. Ho said. Revenue for apparel grew 164 per cent to 1.22 billion yuan and revenue for accessories jumped 250 per cent to 50 million yuan. Combined share of apparel and accessories went up to 48.6 per cent from 39.5 per cent.
Sales volume of Xtep brand footwear increased 76 per cent last year to 18.32 million pairs. Average wholesale price grew 5 per cent to 73.2 yuan. Gross profit margin for footwear was up 1.1 percentage points to 35.6 per cent. Sales volume of apparel rose 1.5 times to 21.5 million pieces and the average selling price grew 7 per cent to 56.4 yuan. Gross profit margin of apparel was 38.1 per cent, representing a 3.7 percentage point growth.
Average wholesale revenue per Xtep brand outlet increased 37 per cent to 552,403 yuan. Mr. Ding was confident that sales per outlet would continue to increase this year, though the growth rate was not expected to be the same as that in 2008. “The financial turmoil has had some adverse impact on the consumer confidence in China. The Beijing Olympics significantly bolstered sales of sports-related products last year.”
Mr. Ding said the group planned to open up to 1,000 outlets in the domestic and overseas markets this year.
About 15 Xtep brand flagship stores would be established in prime shopping locations in key cities.
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Sportswear maker steps up its game
Beijing Olympics raises group’s profile while diversification and expansion of retail outlets give revenue a boost
Wilson Lau
6 April 2009
Mainland-based sportswear specialist Xtep International Holdings capitalised on the sports frenzy fuelled by the Beijing Olympics by aggressively expanding its retail sales network and increasing overall revenue by 110 per cent to 2.87 billion yuan (HK$3.25 billion) last year compared with 1.36 billion yuan for 2007.
The group, in partnership with its distributors and franchisees, increased the number of Xtep-brand retail outlets in the mainland to 5,056 in 2008, representing 15 per cent growth over the previous year.
The number of outlets selling products under the Koling and Disney Sport brands went up 78 per cent to 476.
Gross profit leapt 140.2 per cent to 1.06 billion yuan and gross profit margin increased 4.6 percentage points to 37.1 per cent over 2007.
Net profit jumped 130 per cent to 508 million yuan and net profit margin grew 1.4 percentage points to 17.7 per cent. Basic earnings per share reached 26 fen a 77.6 per cent increase.
The company recommended an 8 HK cents final dividend per share and a 5 HK cents special dividend per share, which represented a 68 per cent dividend payout ratio.
Xtep, listed on the Hong Kong stock exchange since last June, produces and markets footwear and apparel under its Xtep brand.
The company diversified its portfolio by establishing the Koling brand and obtaining the licence to the Disney Sport brand in 2007.
Products sold under the Xtep brand accounted for 91 per cent of the group’s total turnover. Revenue derived from sales of products of the other two brands and original equipment manufacturing operations accounted for the remainder.
Chairman and chief executive Ding Shuipo said although last year was full of challenges, the company achieved a sharp revenue increase because it launched products that met increasing consumer demand for a diverse range of sportswear products combining a high level of functionality and ultra-trendy designs.
Xtep has three in-house product design and two research and development teams employing more than 500 staff.
The company launched about 2,000 footwear designs, 2,600 apparel designs and 2,100 accessory designs last year.
Although Xtep’s retail outlets are spread throughout the mainland, the group strategically targeted the eastern and southern parts of China by opening 12 brand flagship stores mainly in these regions last year.
Mr. Ding said Xtep aimed to tap the fast growing wealth of residents in these regions which registered an average gross domestic product growth of more than 12 per cent, much higher than the national GDP growth of 9 per cent.
Mr. Ding also attributed the group’s strong performance to its distribution resources planning system which covered about 50 per cent of its distributors. “We held four quarterly sales fairs which gathered customers from all over China. By collecting customer feedback we keep ourselves abreast of the latest trends in individual markets.”
Xtep organised training sessions in first- and second-tier cities to improve the quality of service and update staff of retail outlets about the latest products. More than 2,000 people took part, Mr. Ding said.
Group chief financial officer Terry Ho Yui-pok said overall sales of Xtep brand products shot up 117.3 per cent to 2.6 billion yuan. Gross profit margin grew 2.2 percentage points to 36.7 per cent.
Xtep’s footwear revenue was up 84.8 per cent to 1.34 billion yuan, but share of footwear in the brand’s total revenue decreased to 51.4 per cent from 60.5 per cent in 2007 because the group aimed to balance its product mix by introducing more apparel and accessories, Mr. Ho said. Revenue for apparel grew 164 per cent to 1.22 billion yuan and revenue for accessories jumped 250 per cent to 50 million yuan. Combined share of apparel and accessories went up to 48.6 per cent from 39.5 per cent.
Sales volume of Xtep brand footwear increased 76 per cent last year to 18.32 million pairs. Average wholesale price grew 5 per cent to 73.2 yuan. Gross profit margin for footwear was up 1.1 percentage points to 35.6 per cent. Sales volume of apparel rose 1.5 times to 21.5 million pieces and the average selling price grew 7 per cent to 56.4 yuan. Gross profit margin of apparel was 38.1 per cent, representing a 3.7 percentage point growth.
Average wholesale revenue per Xtep brand outlet increased 37 per cent to 552,403 yuan. Mr. Ding was confident that sales per outlet would continue to increase this year, though the growth rate was not expected to be the same as that in 2008. “The financial turmoil has had some adverse impact on the consumer confidence in China. The Beijing Olympics significantly bolstered sales of sports-related products last year.”
Mr. Ding said the group planned to open up to 1,000 outlets in the domestic and overseas markets this year.
About 15 Xtep brand flagship stores would be established in prime shopping locations in key cities.
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