While noting a significant improvement in the overall sporting goods market in China since the beginning of 2014, thanks especially to higher levels of sports participation, Belle International has reported increases of nearly 4 percent in sales as well as operating and net earnings for the first half of this year, ended on Aug. 31, driven by the sports segment.
The Chinese manufacturing, distribution and retail company had net income of 2,158 million renmimbi (€310.3m-$341.3m) on sales of RMB 19,360 million (€2,782.0m-$3,062.8m). The operating margin was stable at 14.7 percent of sales.
In the more sports-oriented sportswear and apparel segment, sales went up by 16.1 percent to RMB 9,413 million (€1,352.6m-$1,489.3m), driven by higher average selling prices, lower promotional activity and the net addition of 95 stores in the last six months. In contrast, sales in the footwear segment declined by 5.0 percent to RMB 9,836 million (€1,413.4m-$1,556.3m), due to lower same-store sales in a weakened market and 424 net store closures since March.
The gross margin of the group improved to 56.7 percent from 56.3 percent in the same period a year ago. Gross margins rose to 68.3 percent for footwear and to 44.7 percent for apparel. The increase in sportswear and apparel was more significant, and it was partly due to tighter inventories in the face of sharply higher levels of demand for the sports brands distributed by the group.
Belle's footwear segment includes the manufacturing and distribution of its own brands, including Belle, Tata and Staccato, as well as the distribution of foreign brands such as Bata, Clarks, Mephisto, Hush Puppies, Merrell and Caterpillar. The sportswear and apparel segment comprises the distribution of sports brands such as Nike, Adidas, Puma, Converse and Mizuno.
