Asics has gone through a year of transformation that saw its sales decrease by 5.4 percent in euros in Europe, the Middle East and Africa (EMEA), but the Japanese company reports early signs of improvement in the areas it targeted for investments.

The company's European performance apparently improved slightly in the last quarter as compared with the previous nine months, when it reported a sales decline of 6.6 percent. The group's reported sales for EMEA amounted to 106,290 million yen (€806.9m-$993.6m) for the full year, which was a decline of 1.2 percent in yen. The regional income declined by 26.6 percent to ¥8,297 million (€63.0m-$77.6m), mostly due to the lower sales. The cost of the restructuring measures implemented in Europe was described as the reason for a sizeable decline in the whole group's profit for the year.

As previously reported, the strategic changes are meant to focus on key accounts and to expand the brand's regional retail network from 26 to more than 100 stores by 2020. The target is to raise the share of own retailing and online sales in its turnover from about 16 percent to 30 percent, including space managed by Asics in about 400 locations owned by key partners.

The group created dedicated teams for strategic accounts and emerging markets, and built up resources in digital marketing and merchandising. The reinforced management structure detailed in November has become fully operational. The number of regional entities focusing on other wholesale partners has been halved from six to three and country management functions have been cut out, but the managers for the U.K. and Ireland, in Italy and in the German-speaking countries all stayed with Asics.

The latest appointment relates to Barry Mellis, previously in charge of the U.K. and Ireland, who started as general manager in South Africa earlier this month. He took over from Brian Kerby, who has been involved in the South African sporting goods business for many years, notably as managing director for Adidas. In the last year, Mellis led the project team in charge of the implementation of the new business structure in EMEA.

The investments in own retailing enabled Asics to lift its retail sales by 14 percent in EMEA for the year, with an uptick of 39 percent in online retail sales. Asics opened six stores in Europe this year, in London, Berlin, Paris, Milan, Copenhagen and Vienna, raising the number of full-priced Asics stores to 32 around Europe. Another five stores were upgraded and the company invested in branded store areas with key retail partners. The company's own store retailing made up about 16 percent of its turnover in EMEA.

The focus on emerging markets has contributed to a sales increase of 30 percent in Russia, while sales in the Middle East have been on the rise since the opening of a regional subsidiary in 2016.

The company also worked on the “I Move Me” campaign, which was launched around the athletics world championships in London and will be expanded to all media resources in 2018. Another campaign, “What The Gel,” was launched in the Asics Tiger category to familiarize younger customers with the brand's gel technology. In the performance category, Asics reinforced its positioning in racquet sports through a partnership with Novak Djokovic earlier this year.

The entire Asics group's sales were almost stable last year. They advanced by 0.3 percent to ¥400,157 million (€3,040.6m-$3.743.6m), as declines in Japan, Europe and the Americas were just about compensated by increased demand in Asian markets.

The group's gross profit moved up by 3.8 percent but its operating income dwindled by 23.2 percent to ¥19,571 million (€148.7m-$183.1m), due to investments in retail stores and digital strategies. The company ended up with profit of ¥12,970 million (€98.5m-$121.3m), down by 16.7 percent, due to an extraordinary loss incurred for of restructuring measures in the European region.

Along with the store openings in Europe, Asics invested in new stores in Harajuku, Tokyo, and in Manhattan, New York. These stores handle the group's multiple brands, as with the concept inaugurated on Regent Street in London. The company ended the year with 876 stores, including Asics Tiger stores in New York, Shanghai and Seoul, and the Onitsuka Tiger Omotesando Nippon Made in Tokyo store. This is the first outlet offering the Nippon Made series.

The product launches included footwear in more sports categories with FlyteFoam midsole material, and the Jyuni range of apparel for active young people. The lifestyle offering was expanded with the Gel Kayano Trainer Knit, featuring a knitted upper. Asics has also been investing in Japanese production facilities for footwear and apparel, to reinforce the production of Japanese-made products with more added value.

The Asics group's sales dipped by 0.4 percent to ¥119.5 billion (€908.1m-$1,118.3m) in Japan, due to weak sales of sportswear and despite steady footwear sales. The regional segment's income shrank by 6.3 percent to ¥5.9 billion (€44.8m-$55.2m) for the year.

The decline in the American region amounted to 7.7 percent in constant currencies, which was blamed on weak U.S. sales. The group's reported turnover in the Americas decreased by 6.0 percent to ¥106.2 billion (€807.2m-$994.1m) but the regional income more than doubled to ¥2,360 million (€17.9m-$22.1m), due to a decrease in provisions for doubtful receivables.

Robust sales of running footwear and Onitsuka Tiger products in China fueled a rise of 13.0 percent to ¥49.1 billion (€373.2m-$459.5m) in East Asia for the year, which was an increase of 10.4 percent in constant currencies. The group's turnover in South Korea declined, as it restructured its retail outlets. Its income in East Asia came out 2.0 percent lower at ¥5.1 billion (€38.8m-$47.7m), although that would have been an increase of 1.2 percent in constant currencies.

Another region that performed well was Oceania, Southeast and South Asia, where sales increased by 15.1 percent to ¥27.7 billion (€210.6m-$259.2m), with a rise of 10.4 percent in constant currencies. Running footwear and Onitsuka Tiger shoes again drove the increase. The regional income amounted to ¥4.0 billion (€30.4m-$37.4m), firming up by 11.7 percent in yen and 6.4 percent in constant currencies.

The group's other business, covering the Haglöfs brand, reported a sales increase of 0.8 percent to ¥9,238 million (€70.2m-$86.4m), which was a decline of 1.3 percent in constant currencies. This was blamed on weak sales of outdoor wear and other items under the Haglöfs brand. The segment suffered yet another loss of ¥253 million (€1.9m-$2.4m) for the year, although that was an improvement compared with a loss of ¥421 million (€3.2m-$3.9m) in 2016.

Asics is forecasting a sales increase of 0.6 percent to ¥205 billion (€1.6bn-$1.9bn) for the first half of this year, and a rise of 6.2 percent for the full year to ¥425 billion (€3.2bn-$4.0bn). The operating profit is projected to more than halve to ¥7.5 billion (€57.0m-$70.2m) in the first half but then to advance by 2.2 percent to ¥20 billion in the full year. However, Asics is forecasting a decline in profit for the half year, which should more than halve to ¥4 billion (€30.4m-$37.4m), and it should still be down by an estimated 7.5 percent to ¥12 billion for the full year.