Why Did The "Shoe King" Brand Of BELLE Ever Become An Agent?

As China's largest fashion

Belle International Holdings Limtied., known as the "shoe king", Belle International Holdings Ltd relies on its "sideline" as a Nike in the wake of China's economic slowdown and weak consumer sentiment.

The biggest agent of China's brand is barely maintaining its medium-term revenue and earnings growth.

After Monday, Belle Ltd.

The group released the interim results as of August 31, 2015. In the first half of fiscal year 2015/2016, the company recorded an increase of 4.3%, from 18 billion 556 million 100 thousand yuan in the same period last year to 19 billion 359 million 600 thousand yuan, and net income increased 3.86% to 2 billion 158 million 100 thousand yuan, compared with 2 billion 77 million 900 thousand yuan in the same period last year.

The shoe industry is the soft spot of Belle Ltd. BELLE group in the past two years. In the first half of fiscal year, the company's footwear business income fell 5%, from 10 billion 355 million yuan in the same period last year to 9 billion 835 million 700 thousand yuan, accounting for 50.8% than the equilibrium line.

The company said that the decline in sales was mainly due to the decline in the number of sales units in the same store. According to the no fashion Chinese network data, in the first quarter and the two quarter, the group's footwear business in the mainland of China dropped by 7.8% and 7.7% respectively. Belle Ltd. BELLE group said that although the unit price slightly increased, it could not offset a significant decline in volume.

The decline in footwear sales also contributed to a 170 drop in the median profit margin to 19.3% in the medium term, and Belle Ltd. BELLE warned that if the footwear business could not be improved, the profit margin of the business would be further reduced.

Although the footwear industry and sports and clothing income are almost equal, but because footwear is mainly self owned brand, its Mao Liyuan is higher than sports and clothing business, so the profitability of footwear business will also greatly reduce the profitability of the company.

In contrast to the weak footwear industry, Belle Ltd. BELLE group is relying on Nike's Nike brand, the largest agent in China, to maintain a rapid growth in sports and clothing categories.

As for the first half of August 31, 2015, the income of Belle and BELLE Apparel Group rose by 16.1% from 8 billion 200 million 100 thousand yuan in the same period last year to 9 billion 513 million 900 thousand yuan.

From the medium-term performance of Belle Ltd. BELLE group, its self employed brand business recorded only 8 billion 761 million 700 thousand yuan in the first half of fiscal year, and once "shoe king" has been reduced to a real agent.

Belle Ltd. BELLE CEO, Sheng Bai Jiao

From the perspective of profitability and profitability, the group's footwear business has also become a drag on business.

In the first half of the fiscal year, the gross margin of footwear business of Belle Ltd. BELLE group fell 4.2% to 6 billion 715 million 900 thousand yuan, while the gross profit of sports and clothing rose by 24% to 4 billion 260 million 300 thousand yuan. The gross profit margin of the two departments was 68.3% and 44.7% in the medium term, respectively, up 60 basis points and 280 basis points higher than the same period last year. The group's interim gross margin was 56.7%, up by 40 basis points.

It is worth mentioning that the gross margin of footwear business is slightly higher because of the weakness of the company and the weak passenger flow, the channel and retailers have chosen to reduce the promotional efforts.

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From the inventory cycle, it can be seen that the above two categories are quite different. As of the first half of August 31, 2015, the Belle Ltd. footwear inventory cycle increased from 220.1 days in the same period last year to 247.9 days, while the sportswear business inventory cycle decreased from 106.4 days in the same period last year to 86.7 days in the first half of August 31, 2015.

In addition to the weakness of China's economy and consumption, consumers' participation in sports is also an important reason for the expansion of sports business.

In essence, nearly 10 international and domestic sports brands that have been in the doldrums have been recovering strongly after the Olympic Games in the past two years.

Belle Ltd. BELLE group also responded to the closing of 424 stores in the first half of its earnings report, saying that it was subject to the prudent influence of department stores and outlets, but the group did not face the risk of large-scale closedown. However, it admitted that it would continue to shut down shops with poor prospects.

As of the first half of August 31, 2015, the Belle Ltd. BELLE group footwear business profit recorded 1 billion 899 million 700 thousand yuan, down 12.5% from 2 billion 170 million 800 thousand yuan in the same period last year, and the operating profit of sports and apparel business was 1 billion 1 million 400 thousand yuan, up 64.3% from 6.094 yuan a year earlier. The overall operating profit of the group was 2 billion 839 million 700 thousand yuan, 4% more than that of the same period last year, the operating profit rate remained 14.7%, and the net interest rate dropped slightly by 10 basis points to 10.

Belle Ltd. BELLE Group intends to send a medium-term interest rate of 0.16 yuan, up 6.7% from 0.15 yuan a year earlier. However, it sent a special dividend of 0.25 yuan in the same period last year, but this year there was no dividend, and the total dividend yield fell by 40% in real terms.

On Monday, Belle Ltd. BELLE international shares closed at HK $7.260, up 2.254%, and the stock has fallen nearly 17% so far this year.