China: Athletic shoe group's revenues plunge 20%
Chinese sportswear group Xtep International Holdings has reported a 21% decline in revenues for 2013 to RMB4,343.1 million ($703 million), which it attributes to “self-initiated sales order reductions” and joins peers Li Ning and Anta which also suffered due to overstocking and high inventory levels in 2012 and 2013.
The manufacturer and brand boosted its production capacity at facilities in Anhuiand and Quanzhou, where it produced 17 million pairs of athletic shoes and 8.5 million articles of clothing, while it sold 26.5 million pairs and 30.2 million pieces, respectively.
It increased its R&D investment by 16.6% to $18 million was appointed official sportswear partner of the National Games for the third year.
Xtep CEO Ding Shui Po said: “Retail channel management continues to be our key focus in 2014 and our efforts made last year are beginning to bear fruits. Our recent operating data such as retail channel inventory, retail discounts, product sell-through rates and sales orders for first three quarters of 2014 reveal that a recovery is under way, given their ongoing improvement trends."
During the year, the group closed around 150 under-performing stores. As of 31 December 2013, the group operated 7,360 retail outlets.
Mr Ding added: "Leveraging on our effective branding strategies, extensive distribution network nationwide and competitive advantage of our solid in-house production capacity, we are ready to seize the opportunities stemming from increasing demand due to growing sports awareness, urbanisation and brand consolidation and will grow stronger after this round of industry consolidation."
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