BELLE Is Affected By Footwear Business Downturn, Net Profit Fell Nearly 40%

Once known as "shoe king".

Today, it has been dragged behind by the footwear business.

A few days ago, 2015/2016 annual report released by BELLE International (hereinafter referred to as BELLE) showed that

The decline in net profit attributable to shareholders of listed companies has dropped by nearly 40%.

BELLE's annual report shows that as of February 29, 2016, the group's revenue was 40 billion 790 million yuan, an increase of 2% over the same period last year, and the net profit attributable to shareholders of listed companies was 2 billion 934 million yuan, down 38.4% from the same period last year.

The main reason for the decline in net profit is the decline in the flow of footwear business and the change in consumer preferences, which continues to show a decline in sales in the same store, resulting in a 8.5% decrease in the income of footwear business compared with the same period last year.

BELLE business mainly consists of two parts, one is footwear business, the two is sports and clothing business, the decline of the footwear business performance directly affects BELLE's overall net profit.

It is noteworthy that sports,

Business revenue increased by 16.2% over the same period last year, but it has not changed the fate of BELLE's overall net profit decline.

During the reporting period, there were 682 newly added sports and apparel retail outlets.

The total number of self operated retail outlets is 21017, of which 20873 are located in the mainland and 144 in Hongkong and Macao.

The decline in footwear business led to a 366 reduction in the number of shoe self retailing outlets in the mainland during the reporting period. The closure of these shops was due to the adjustment of business or structural pformation in some department stores.

For the decline in footwear business revenue, BELLE said it was mainly due to the decline in gross margin of the group's products in the second half of the year.

On the one hand, the weakness of demand side exceeded market expectations. On the other hand, the warmer and later cold season in the early winter of last year not only affected the sales of winter boots, but also resulted in the heavy selling focus, the larger overall discount in the quarter, and the negative impact on gross margins.

In addition, the cost of footwear business, including sales and distribution expenses and administrative expenses, has increased to a certain extent compared with last year.

The industry believes that footwear business is always the core business of BELLE.

Subject to the status of agents, sports and clothing business has limited mitigation effect on BELLE's performance. To achieve overall performance improvement, BELLE still needs to expand its product innovation and channel aspects around footwear business.

However, the decline of BELLE footwear business is not a case. Previously, many domestic and foreign footwear brands such as Daphne, Saturday, Hasen, cross and so on also had news of net profit decline, footwear business shrinking or even a large number of stores.

In this regard, the industry analysis, the traditional footwear industry is facing many problems, not only in the product design homogenization serious, in warehouse pportation and order processing cycle is also relatively long, eventually leading to high inventory.