Topsports, the leading Chinese sports retailer and distributor, which previously belonged to Belle International, has reported a 20 percent increase in net income to 2,770.1 million yuan renmimbi (€355.0m-$401.5m) for the financial year ended Feb. 28 on a 7 percent increase in sales to RMB 36,009 million (€4,014.0m-$5,218.7m). The gross margin declined by 1.3 percentage points to 40.8 percent, due to higher levels of discounting, but operating expenses were cut by 12 percent.
The company had a rough first half, due to the coronavirus outbreak. While reducing the number of stores by 389 units in the course of the past year, it launched its own digital app in February 2020, which had 2.7 million users one year later. Memberships in its loyalty program grew from 27.1 million to 40.9 million in the course of the year, and they accounted for 95.3 percent of all in-store purchases in the final quarter.
While continuing to work mainly with a handful of brands, Topsports has been shifting to larger locations at its stores. Most of the 1,102 low-productivity stores that were shut down in the course of the year had surfaces of less than 150 square meters. The number of stores over 300 square meters grew by 23 percent to 750. The company opened a total of 713 new doors, ending the year with a fleet of 8,006 units.
Nike and Adidas accounted for 87.3 percent of Topsports’ revenues last year. Together, Puma, Converse, The North Face, Timberland, Reebok, Asics, Onitsuka Tiger and Skechers represented 11.8 percent of the turnover. The retail business accounted for 85.3 percent of the revenues and wholesale for 13.8 percent. The e-sports business contributed RMB 81.5 million (€10.4m-$12.7m). The balance consisted of concession fees.
