Belle to buy rival Big Step for $145.5m
China-based women’s shoe retailer Belle, which distributes for sportswear companies Nike and adidas, has said it will buy rival retailer, Big Step. It also aims to add 10% more stores during 2012 after posting a 24% profit increase.
Belle’s net income in 2011 rose 24% to $672 million from a year earlier. The company will buy Big Step, a retailer of Nike and adidas sportswear with 600 outlets in China, for $145.5 million, it said.
The future potential for growth in China’s consumer retail market “will not change significantly due to short-term disruptions, given the economic growth potential as well as the trend of consumption upgrade and measures to promote domestic demand,” Belle said in the statement to Hong Kong’s stock exchange.
Consumer confidence was impacted by the slowing economy in China as higher costs, sluggish demand from abroad and the European debt crisis led to a slowdown in growth in the exports sector, Belle said.
Profit margins will be “steady” this year, Belle’s CEO Sheng Baijiao said at a briefing in Hong Kong. Production costs will stabilise and the company may increase prices slightly in 2012, he said. Gross profit margin widened to 57.2% in 2011 from 55.7%, and operating profit margin widened to 18.2% from 16.7%, Belle said.
Sales increased 22% to $4.6 billion in 2011, the company said. The retailer said it added 1,958 footwear stores in China, a 24% increase from 8,312 outlets at the end of 2010.
