Alpargatas is investing heavily in its two in-house sports brands, Rainha and Topper, while strongly developing its sales of Mizuno and Timberland, for which it has the distribution in Brazil. The Brazilian company has also extended its deal with Mizuno to Argentina, as it raised its control over the Argentinian company by the same name.
In presenting its annual results for 2011, the group claimed that it boosted its market share last year in Brazil in sports shoes as well as in sandals, which is its other core business. While the number of its Havaianas and Dupé sandals sold in Brazil grew by 2.4 percent to 194.6 million pairs in 2011, the group's sales of sports and work shoes sold under all the Mizuno, Timberland, Topper, Rainha and Séte Leguas brands rose nationally by 1.9 percent to 10.8 million pairs (about 9 million pairs excluding work shoes). In terms of value, however, sales in these two categories increased by 12.4 percent and by 18 percent, respectively, thanks to higher average selling prices.
For 2011, the company has reported a 15.4 percent increase in total revenues to 2.6 billion reais (€1.08bn-$1.43bn), but the growth was mostly due to higher average prices and a better price mix. In terms of volume, the number of pairs of shoes and units of clothing sold increased by only 2.3 percent to a total of 249.6 million pairs or units. Of those, 211.4 million pairs or units were sold in Brazil, 2 percent more than in 2010, but with a decline of 3 percent in the fourth quarter.
Without providing a specific sales breakdown among its different brands, Alpargatas reported sales increases of 48 percent for Mizuno and 37 percent for Timberland's wholesale business. Sales at its Timberland stores in Brazil grew by 9.6 percent on a same-store basis. Sales through Timberland's online shop grew by 23 percent, and the company launched an online store for Topper in February 2011, which received 332,000 visits in the course of the year.
The company launched a new logo for Rainha, a very old Brazilian sports brand, while diversifying it into the active running segment in shoes as well as apparel. Alpargatas also launched a new range of football boots and jerseys for Topper, which claims the leadership in the Argentinian and Uruguayan sports markets in terms of volume, and developed its range of running shoes and rugby products. It also introduced the brand in Peru and Colombia. For Mizuno, which has become one of the leading running shoe brands in Brazil, it introduced its volleyball and football products in the country.
Overall, the group booked a slight increase in its consolidated Ebitda to R$404.5 million (€167.8m-$222.2m) last year, representing a reduced operating margin of 15.7 percent. The net profit reached a record of R$307.4 million (€127.5m-$168.9m), 1.4 percent higher than in 2010 and equal to 12 percent of sales, in spite of a decline of 15.4 percent in the fourth quarter.
Alpargatas raised its stake in its Argentinian company further to 91.5 percent last year, and it is striving for full ownership. The management reiterated its interest in further acquisitions. As of last Dec. 31, the company had net cash of R$671 million (€278.4m-$368.6m) and financial debt of only R$235.9 million (€97.9m-$129.6m).
Brazil represented 67 percent of Alpargatas' revenues last year. Outside the country, the company's sales rose by 3.8 percent in volume but fell by 10.3 percent in reais to R$715.9 million (€297.0m-$393.3m). In local currencies, they declined by 1.2 percent in the U.S. but rose by 28.5 percent in Argentina, by 35.6 percent at Alpargatas Europe and by 20.9 percent to distributors in other countries. Most of the European sales are under the Havaianas brand.
