Chinese sports retailer and distributor Topsports saw its net profit in the six months ended Aug. 31 decrease by 19.9 percent to 1,145.4 million renminbi (€158.6m), and sales slip by 15.1 percent to RMB 13,218.0 million (€1,829.8m) as recurrent Covid-19 restrictions in China took their toll on store traffic.
Despite the decrease in its top line in the March to August period, Topsports said it had instead seen a “significant” increase in online sales. Another bright spot was represented by the gross margin, which expanded by 1.1 percentage points to 45.6 percent, as the company highlighted prudent markdown control and cooperation with brand partners.
Topsports also indicated its sales performance had improved as the first half progressed, as total sales of retail and wholesale operations registered only a low-single-digit decline in the second quarter.
In the first half, Nike and Adidas sales decreased by 14.6 percent to RMB 11,544.0 million (€1,598.5m) and accounted for 87.3 percent of total revenues. Sales of other brands – including Puma, Converse, Vans, The North Face, Timberland, Reebok, Asics, Onitsuka Tiger, Skechers and Li-Ning – fell by 18.2 percent to RMB 1,557.6 million (€215.8m) and represented 11.8 percent of the sales pie. E-sports revenues slipped by 19.2 percent to RMB 25.3 million (€3.5m). The remainder consisted of concessions fees.
By sales channel, retail sales declined by 13.3 percent to RMB 11,018.9 million (€1,524,7m), and wholesale sales decreased by 23.4 percent to RMB 2,082.7 million (€288.3m).
Topsports continued with a strategy of closing smaller, low-productivity sites while shifting to larger locations in the first half of its financial year, cutting its store count by 10 percent to 6,928 in the period as the gross selling area declined by only 5.1 percent. Stores larger than 300 square meters grew to 14.9 percent of the total fleet from 12.9 percent as of Feb. 28.
