Like the much larger Yue Yuen group, the Kingmaker Group is involved in the shoe manufacturing business as well as in retailing in China. Announcing a new management and a big drop in its shoe retailing sales, the Hong Kong-based company said it will review the retail business this year, hinting that it may close it down or look for partners if it doesn't see a path to improvement.
Founded in 1981, Kingmaker boasts partnerships with major athletic, outdoor and lifestyle footwear brands like Asics, CAT, Clarks, New Balance, Skechers and Stride Rite.
In the financial year ended last March 31, Kingmaker's total revenues declined by 1.5 percent to 2,343.2 billion Hong Kong dollars (€274.bn-$304.0bn). Revenues from external customers fell strongly in the U.S. to HK$479.4 million (€56.1m-$62.2m). In Europe and Asia, they grew to HK760.3 million (€88.9m-$98.7m) and HK796.9 million (€86.9m-$96.3m), respectively.
While the revenues of its manufacturing operations dropped by one percent to HK2,308.2 billion (€270.0m-$299.5m), those of its retail and wholesale operations plunged down by 32 percent to HK35.0 billion (€4.1m-$4.5m). Kingmaker blamed the softening economy and the migration of consumers to lower price points due to an increasing shift to online retailing.
On the other hand, the gross margin of the group improved last year by 1.9 percentage points to 16.4 percent. Net earnings jumped by 30 percent to HK$120.2 million (€14.1m-$15.6m). Segment results increased on the manufacturing side to HK158.5 million (€18.5m-$20.6m). The results of the retail and wholesale business remained negative, with losses declining to HK20.8 million (€2.4m-$2.7m).
In the past year, Kingmaker made progress in consolidating its manufacturing facilities in Mainland China, moving to inland provinces and shifting some of the production to South and Central Vietnam and Cambodia. As of last March 31, 70 percent of the capacity was settled in Vietnam and Cambodia. Kingmaker is looking at a ratio of 80 percent in the longer term.
As previously reported, Kingmaker's former chairman and chief executive, Mickey Chen, was murdered in April by a production supervisor. The company has now appointed a 59-year-old co-founder of the group, Helen Huang, as its new CEO, taking the place of an interim CEO, Phillip Brian Kimmel. Huang has been in the shoe business for 39 years. She has been working lately as an executive director of Kingmaker in charge of human resources and finance. Meanwhile, Daniel Chan, formerly vice chairman and non-executive director, has moved from the position of acting chairman to that of executive chairman.