China Dongxiang, the Chinese company that owns the rights to the Kappa brand in China, Macau and Japan, raised its sales by 2.2 percent to 1,501 million yuan renminbi (€200.8m-$218.0m) last year, pushed up by the takeover of the Kappa Kids operations in China.
China Dongxiang had 1,563 Kappa stores at the end of the year, including 262 Kappa Kids stores. This represents an increase of 296 stores, including all of the Kappa Kids stores and an extra 34 Kappa stores.
The Kappa brand alone saw its sales dip by 1.5 percent in China to RMB 1,015 million (€135.8m-$147.4m), chiefly due to a sales decline of 6.0 percent for footwear, while apparel sales inched up by 0.3 percent. However, the Kappa Kids business added sales of RMB 86 million (€11.5m-$12.5m) in China last year. Sales were supported by marketing investments around the Kappa brand's centenary, such as a moving exhibition that toured eleven Chinese cities.
Separately, China Dongxiang opened more stores for the Phenix brand of winter sports apparel in China, to capitalize on growing interest in skiing ahead of the Winter Olympics to be held in Beijing in 2022. The group said it focused on high-end ski centers and sought to appeal to avid skiers by opening brand stores at resorts such as Wanlong, Genting and Thaiwoo, as well as urban locations in the Beijing districts of Sanlitun and Zhushikou.
China Dongxiang's sales in Japan shrank by 10.8 percent to RMB 371 million (€49.6m-$53.9m) for the year. The Phenix brand's sales contracted by 9.9 percent to RMB 247 million (€33.0m-$35.9m) and the group's turnover with the Kappa brand in Japan was down by 12.7 percent to RMB 124 million (€16.6m-$18.0m).
The group raised its online sales by 20.1 percent for the year, with a gross profit margin of 63 percent. China Dongxiang said that Kappa was one of only four international brands involved in the global fashion festival organized by T Mall for Singles Day. It continued to consolidate its resources in e-commerce to draw more customers.
The second activity launched by the group, focusing on investment, brought in net investment profit of RMB 708 million (€94.7m-$102.8m), which was an increase of 14 percent.
The whole group reported a gross profit margin of 56.7 percent, up by 0.5 percentage points, before the reversal of impairment losses of inventories. Its operating profit was up by 1.1 percent to RMB 1,016 million (€135.9m-$147.6m) and net profit landed at RMB 870 million (€116.4m-$126.4m), up by 8.3 percent.
