Lisa Dengler
Faustine Lara
Lola Mansil
Izzy Bea
Theo Ortengren
361 Degrees International Limited, one of the leading sports brand enterprises in China, is pleased to announce the following operational and financial highlights for the first calendar quarter ended 31 March 2011:
• Same store sales for the first quarter improved by 14.7%
• No. of retail outlets increased by a net of 194 to 7,457 as at 31 March 2011
• Discounting at the retail level remained at recent levels of about 20%
• Channel inventory was 3.3 times of monthly sales at 31 March 2011
• e-POS connectivity now topped 3,017 stores
In this first quarter, the Company registered significant sales, especially in January, as distributors continued to collect their orders from the Spring/Summer and Winter Trade Fair held last August and April respectively. The Spring/Summer Trade Fair is the largest of the Company’s three trade fairs in the year, and comprised a preponderance of apparel as well as a sizable footwear collection.
At the retail level, the first calendar quarter of 2011 demonstrated the continuing strong momentum from the previous quarter and sales were particularly robust in January and February. The month of March was typically much quieter, as demand tailed off after the Chinese New Year.
According to data uploaded from the e-POS terminals from 2,689 retail outlets in 17 regions, all of which had been in operations for more than 24 months, the average SSS growth for this quarter was 14.7%. Over 85% of these outlets showed a year-on-year improvement in sales, with growth noticeably higher in the smaller cities.
During this quarter under review, 194 stores, on a net basis, were added to the franchised network, bringing the end of March total to 7,457. Of these new additions, 53 are replacement stores, having relocated from other sites following the expiration of tenancies. Over 85% of these new stores were in Tier 3 or smaller cities.
As a result of the relatively solid retail sales, channel inventory dropped to 3.3 times of monthly sales, against 3.9 times at the end of December. The Company considers this to be a very healthy level as this included all stocks at both the distributors and retailers. The calculation was based on data obtained from the distributors in respect of 5,160 retail outlets, as measured against their average monthly sales.
The Company is also pleased to report that progress on its e-POS linkages to the retail outlets means that 3,017 stores as at 31 March 2011 now submit real-time sales data, and plans are on track to include the remaining franchised network by June 2012.
During this quarter, the Company bought back 900,000 of its own shares at an average price of HK$5.00 per share and which have subsequently been cancelled. The Company intends to pursue this Share Buyback scheme as interest rates remain relatively low
The Hong Kong Houseware Fair and Hong Kong International Home Textiles Fair will open April 20th at the Hong Kong Convention and Exhibition Centre (HKCEC) and continue through April 23rd. The fairs will take place one week prior to the 27-30 April Hong Kong Gifts & Premium Fair, also being staged at the HKCEC, and the Hong Kong International Printing & Packaging Fair at AsiaWorld-Expo.
These four events organised by the Hong Kong Trade Development Council (HKTDC), are expected to attract more than 6,600 exhibitors.
Global Green Trend
At a press conference today, HKTDC Deputy Executive Director Benjamin Chau said consumers from around the world are becoming more conscious of environmental protection and low-carbon living, driving a fast-growing demand for green products.
"Companies from every industry are researching new green solutions to tap the consumer market," he said. "To respond to this market trend and better meet industry needs, we continue to enhance our fairs by setting up a themed zone to promote green products."
The 26th edition of the Houseware Fair will feature a new Green Living Zone to showcase a spectrum of innovative green houseware items for homes and buildings. Green products include items such as bamboo bowls and biodegradable garbage bags.
At the second Home Textiles Fair, visitors can find many eco-friendly products, which are made of biodegradable material or made using green manufacturing techniques. "The Gifts & Premium Fair will also include a new themed zone for Green Gifts; and the sixth Printing and Packaging Fair will present various green solutions for the industry."
Connecting with Creative Design
Jeffrey Lam, Chairman of the Houseware, Home Textiles and Gifts & Premium Fairs' organising committee, said that with increasing operational costs, companies should add value to their products by working on design and branding.
"Developing ODM and OBM is the market trend, and the Hong Kong Houseware Fair is an ideal platform to promote branded products with innovative designs to the global market," he said. "Today's consumers tend to focus on the extrinsic value of a product, including its design and branding. So, a creative design along with functionality become indispensable for successful products."
Reflecting that market trend, the HKTDC will introduce themed zones at the fairs to bring together creative designs with practical utility. The Hall of Elegance at the Houseware Fair; the Hall of Glamour at the Home Textile Fair; and the Hall of Fine Designs at the Gift Fair are designed to promote branded products and innovative designs. Among the many interesting products which will be on display are blinds made of bamboo, grass or seaweed; carpets made of natural fibre extracted from the husks of coconuts; a chair-like egg cup made of silicone; USB memory sticks with various creative designs and a paper greeting card which delivers a video greeting.
Rising Living Standards, Rising Demand
The Hong Kong Exporters' Association Vice-Chairman Benson Pau noted that The Hong Kong Gifts & Premium Fair "is the biggest gift fair in the world," and predicted that the 26th edition of the event will attract more than 4,030 exhibitors from 36 countries and regions. "We will also co-ordinate over 380 local exhibitors to set up the Hong Kong Exporters' Association Pavilion," he said.
As living standards continue to improve, consumers are increasingly conscious of their health. This year's gifts fair will respond with a new Personal & Well-being Gifts Zone to help companies capitalize on the trend.
The pet supplies market is also growing in parallel with consumer market trends and improving living standards. Data from the Euromonitor research institute reveals that global sales of pet supplies recorded growth in recent year, especially the food and health products for pets are capturing a rapidly growing customer base. In response, the World of Pet Supplies at this year's fair will feature a new Pet Food & Supplements section.
Once a staple for every fraternity brother in the South, Duck Head is returning to its roots in Nashville, TN, where it was established in 1865. Duck Head plans to offer products for delivery as soon as the 2011 back-to-school season and will release new products over the next six months.
Nashville Apparel Company DBA Duck Head Apparel will manufacture and distribute the affordable, quality apparel to specialty and chain retail stores. In recent years the Duck Head brand generated retail sales in excess of $200mm. Nashville Apparel Company looks forward to building Duck Head by reintroducing this historic lifestyle brand into the market.
Bill Reese, President of Duck Head Apparel Company, started his career over 22 years ago working for the Nashville-based O'Bryan Brothers, which originally created the Duck Head brand. Bill has played an integral part in bringing the Duck Head brand "home" to Nashville.
"The Duck Head brand is about more than just a pair of khakis. It represents a way of life that revolves around taking pride in how you look, spending time with family and friends, and enjoying life," says Reese. "We want Duck Head Apparel back on retailers' shelves, so consumers throughout the country can be part of Duck Head and experience the brand again."
The world has certainly seen its share of change since 1865, when the O'Bryan Brothers founded the Duck Head brand in Nashville, TN. From our home base in Nashville, we're still delivering dependable, classic apparel and accessories to those who take pride in who they are, where they live and what they wear. We believe in our legacy and always will. "They are not khakis, they're Duck Heads, and the tradition continues."
Debenhams announced that it has bucked the downward trend seen by other High Street retailers by boosting half year interim profits by 4.5 per cent to £129.2 million.
The increase in profits means that the retailer has produced six consecutive halves of pre-tax profit growth.
Debenhams will also be reintroducing a dividend for shareholders and has reduced its debt by £165.2 million.
New exciting young designers such as Jonathan Saunders, Preen and Jonathan Kelsey have spurred demand, bolstering the retailer's reputation for selling leading fashion at affordable prices.
The existing Designers at Debenhams portfolio has been extended with Julien Macdonald adding 'Diamond' to his offer – the little sister to his successful Star range. J Jeans by Jasper Conran was also extended into menswear.
One of the biggest sellers was cosmetics and perfumes, with an increase in market share from 26.8 to 28.1 per cent contributing to the sweet smell of success.
Online sales have jumped by 82.4 per cent, boosted by a new mobile iPhone app which lets customers buy Debenhams products from where ever they are.
Its brand advertising campaign, featuring well known designers including Jasper Conran, Aliza Reger, Ben de Lisi and Julien Macdonald, is also paying off with sales of products featured soaring. In some cases lines were up 300%.
The retailer also saw market gains in women's casualwear and childrenswear.
And Debenhams believes the price of cotton may fall soon, bringing lower prices and better value to customers.
Other highlights include:
• Lipsticks, mascara and nail varnish combined sales break the one million volume barrier in the first six months of the year for the first time
• Lipstick +19%, mascara sales +21% nail varnish +21%
• Sales of bottled fragrance +7.8% and gift sets +11.7%. Sold nearly 4m perfumes in the period
• Sales double of Ben de Lisi Mondrian dress due to tv ad
• Reger by Janet Reger bra and panty set up 300% due to tv ad
• Nearly one million handbags sold during first six months. Jasper Conran J Jeans shoulder bag being the most popular
• Nearly 40,000 party dresses sold in the week prior to Christmas
• Top sellers online include Egyptian cotton towels, Christian Lacroix perfume, Thornton's chocolates, Silverlit remote control Helicopter.
• 15,000 Red Herring aviator jackets 'fly out of the stores'
• In recent weeks Royal Wedding memorabilia fever hits stores with 14,000 units of Kate and Wills china being snapped up
• Market share gain in childrenswear gathering momentum due to popular items such as bluezoobaby elephant sleepsuit, bluezoo heart top and the bluezoo chimp short sleeve tee and Baker by Ted ranges.
• £4m chairs sold from within the home division
• Customers opt for mugs for their morning cuppa with 350,000 sold
"We are pleased with the performance of the business in the first half. The trading environment has been difficult but our focus on profit and cash generation has continued to deliver returns. Debenhams has now produced six consecutive halves of pre-tax profit growth in what has been a consistently challenging retail climate", said Rob Templeman, chief executive, Debenhams.
"Looking forward, there are some encouraging signs that commodity prices such as cotton may fall which could be positive for both consumers and retailers in terms of pricing We will continue to ensure that our focus on offering our customers outstanding choice, quality and value remains at the forefront of our decision making," added Rob
Financial Highlights
• Recommencement of dividends with interim dividend of 1.0p per share
• Earnings per share up at 14.5% from 6.2p to 7.1p
• Net debt reduced by £165.2 million during half to £351.6m
• Group gross margin up 20 basis points
Debenhams (excluding Magasin) gross margin up 30 basis points
Magasin du Nord gross margin up 240 basis points
• Headline profit before tax and exceptionals in line with market expectations, up 4.5% to £129.2m
• Strong de-leveraging since the year end; net debt to EBITDA improved from 1.8x to 1.3x.
• Group gross transaction value up 3.2%
• Group like-for-like sales flat including VAT (down 1.5% excluding VAT)
Zuoan Fashion Limited, a leading design-driven fashion casual menswear company in China, announced its financial results for the fourth quarter and full year ended December 31, 2010.
James Hong, Founder, Chairman of the Board and Chief Executive Officer, commented, "We were pleased with our results for the fourth quarter and 2010 fiscal year. We enjoyed meaningful double digit growth over the prior year as measured by store count, revenue, gross profit, operating profit and net income. Our growth was primarily driven by distributor sales volume and the expansion of our sales network."
"In order to accelerate the expansion of our successful distributor model, we plan to open direct flagship stores which we believe will motivate distributors to expand their distributor store network at a faster rate, stimulate distributor store sales in the nearby regions as well as to strengthen Zuoan's brand equity. In order to focus on the opening of our flagship stores, we successfully transferred all 31 of our direct normal stores to our distributors in January 2011. In addition, we appointed three additional distributors in January 2011 in order to continue our sales network expansion efforts."
"We have built an excellent platform for future growth through our initiatives including expanding our distribution network coverage, building our flagship store network and enhancing our marketing activities as well as strengthening our design capabilities. We are excited to continue to build our brand and improve our revenue and profit growth this year and beyond," concluded Mr. Hong.
Fourth Quarter 2010 Financial Highlights
• Revenues in the fourth quarter of 2010 were RMB258.2 million ($39.1 million), an increase of 26.9% from RMB203.4 million in the same quarter of 2009.
• Gross profit in the fourth quarter increased 21.0% year over year to RMB103.8 million ($15.7 million) from RMB85.8 million ($13.0 million).
• Gross profit margin was 40.2% compared to 42.2% in the prior year period and 41.2% in the 2010 third quarter. Fourth quarter 2010 gross margin decreased primarily due to the Company's efforts to effectively manage its inventory by reducing out-of-season inventory at prices discounted below the Company's general wholesale price range as well as clearing shop level stock as the Company's direct stores were transitioned to its distributors.
• Net income was RMB55.3 million ($8.4 million), an increase of 43.5% from RMB38.5 million in the same quarter of 2009.
• Basic and diluted earnings per share increased to RMB0.69 ($0.10) in the fourth quarter, equivalent to RMB2.77 ($0.42) per American depositary share ("ADS"), compared to basic and diluted earnings per share of RMB0.48 ($0.07), equivalent to RMB1.93 ($0.29) per ADS, in the fourth quarter of 2009.
• Pro forma diluted earnings per share, which takes into account convertible bonds converted since FY10, increased to RMB0.66 ($0.10) in the fourth quarter, equivalent to RMB2.63 ($0.40) per ADS, compared to pro-forma diluted earnings per share of RMB0.46 ($0.07), equivalent to RMB1.85 ($0.28) per ADS, in the fourth quarter of 2009.
Full Year 2010 Financial Highlights
• Total revenue for the full year 2010 increased 25.8% to RMB872.1 million ($132.1 million) from RMB693.1 million in 2009.
• Gross profit increased 26.6% to RMB356.9 million ($54.1 million) in 2010 from RMB281.9 million ($42.7 million) in 2009 and gross profit margin increased by 20 basis points to 40.9% in 2010 from 40.7% in 2009.
• Net income for the full year 2010 was RMB183.0 million ($27.7 million), an increase of 18.9% from RMB153.9 million in 2009.
• Basic and diluted earnings per ADS increased 18.9% to RMB9.15 ($1.39), equivalent to $0.35 per share, compared to $1.17 diluted earnings per ADS, equivalent to $0.29 per share, in the prior year.
• Pro forma diluted earnings per ADS increased 18.8% to RMB8.75 ($1.33), equivalent to $0.33 per pro forma weighted average diluted share, compared to $1.12 pro forma diluted earnings per ADS, equivalent to $0.28 per pro forma weighted average diluted share, in the prior year.
• The number of Zuoan stores increased 10% to 1,101 at the end of 2010 compared to 1,000 stores at the end of 2009.
Fourth Quarter 2010 Financial Performance
Revenue for the fourth quarter was RMB258.2 million ($39.1 million), a 26.9% increase from RMB203.4 million ($30.8 million) in the same period last year. The increase in revenue was driven by both distributors and direct stores sales volume. Fourth quarter distributor sales increased 23.6% to RMB238.7 million compared to RMB193.2 million in the fourth quarter of 2009 while fourth quarter direct store sales increased 91.3% to RMB19.5 million compared to RMB10.2 million in the prior year period.
A total of 26 distributor stores were opened in the 2010 fourth quarter resulting in a total of 1,070 distributor locations at the end of 2010 compared to 978 distributor locations at the end of 2009. There were no direct stores opened in the 2010 fourth quarter as the Company made plans to transition its 31 direct stores to its distributors in January 2011.
Prime Minister Wu Den-yih recently stated that, the government will not break its promise of shifting the fifth naphtha cracking plant from its present location at Kaohsiung in southern Taiwan.
He while responding to a media query examining the local development of the project in Kaohsiung said that, the plant could be shifted elsewhere that is to another city, county or even to a different country.
Nevertheless, if the state government and local inhabitants decide to retain the project in the city in view of the employment opportunities and the local economy, his government would be happy to honour such a "public opinion," Wu said.
"India is not a homogenous group of consumers. There are different layers of the middle class, like the layers of a cake. You should be aware of which part of the cake you want to bite into", said Mr Ajay Amalean, Director - MAS Holdings.
Mr Amalean was speaking at the ‘LBR-LBO CEO Forum’ on the role of CEOs and about placing Sri Lanka on the world map. He said that sales of their lingerie brand ‘Amante’ were growing very strongly in India and hope to operationally break even this year.
Amante was launched in India in 2007 by MAS holdings, which is amongst the biggest clothing exporters from Sri Lanka and supplies to globally renowned brands like Victoria's Secret, Nike, GAP and M&S.
MAS Holdings, which has sales close to US $800 million started operations in 1987, was the first to manufacture lingerie’s in Sri Lanka. It currently employs around 45,000 people in 30 plants in nine countries and has four design studios in Hong Kong, Colombo, New York and London.
Speaking about the Indian market he said, "Although India is a huge market and is widely talked about for its 500-million strong middle-class, the country was actually several different markets".
"India is not a homogenous group of consumers. There are different layers of the middle class, like the layers of a cake. You should be aware of which part of the cake you want to bite into", he informed top honchos from the industry.
"We are having phenomenal growth in India at an average of 40 percent, in a category, which itself is growing at 10 percent. On the other hand, our competitors are struggling, even after being in the Indian market for 8-10 years", he added by saying.
"Several brands launched in India, looked very enticing, but a lot many brought products made for different markets like, the UK or Germany and expected them to fit the Indian women, so ultimately they did not succeed.
"However, MAS designed lingerie products, specifically for Indian women. We physically measured 1,500 Indian women, as lingerie is worn very close to the body and needs to fit absolutely well, so we made a product, specifically for the Indian consumer", he observed.
Informing further about their foray in to the Indian retail market, he said, "We also remained focused on lingerie’s and used a very effective retail network of department stores, although we were also tempted to start our own retail outlets like the other brands.
"However, two weeks before the opening, we realized, we would be paying for New York type real estate prices and selling at Indian prices. The two do not go together. So, we gave up the dream of turning retailer and instead became a brand and started a distribution channel. That's the reason for our success - understanding the market place”, he emphasized by saying.
China Fushun textile and garment industrial park is expected to take a shape by the end of this year. By that time, work for the first phase of the park will start showing results and initial operations will begin.
With an investment of about 500 million Yuan, the construction work for the park has been started from September 2010.
Located in Fushun town, Zigong County of Sichuan province, the park is divided into two phases. In the first phase, the construction has taken place on 600 Mu (one hectare=15 Chinese Mu).
In the first phase, a wholesale market with 4,500-5,000 clothing stores and a garment processing zone containing 150-200 garment factories has been built.
In addition to that, construction of a comprehensive service area containing logistics, catering, business hotels, office buildings, staff quarters, supermarket, a car parking of about 20,000 square meters and other infrastructural facilities have been included in the first phase.
The second phase will commence with a long-term planning. In the second phase, 8,000-10,000 stores and 800-1,000 garment factories will be built on a 1,500 Mu area.
With a clear vision for the future, Fushun textile and garment industrial park will be converted into a national specialized clothing industrial park in five years.
China Xiniya Fashion Limited, a leading provider of men's business casual apparel in China, announced that it has expanded its marketing efforts through the sports channel of CCTV, the largest television station in China. CCTV5 broadcasts live sports such as soccer, tennis, badminton and Formula 1 auto racing and has a high level of male viewership.
CCTV 5 has a viewership of approximately 45 million daily during prime time from 18:00 to 24:00. Approximately 65% of its viewers are male and approximately 37% of the male viewers are ages between 25 and 45, which is consistent with Xiniya's target customer base. Xiniya's commercials will be up to 10 seconds long and will be played before and during the two most watched daily programs 'Sports News" and "Sports World" for a five-week period. These two daily programs are the most watched TV programs in CCTV 5 during prime time.
Jacky Cheung, Xiniya's brand spokesperson and China's leading singer and actor, will be featured in the advertisements. In addition, Xiniya's TV commercials will be broadcasted on a daily basis at various other times during prime time of CCTV 5. This represents an expansion of Xiniya's existing advertising campaign around the popular CCTV 12 program, "Moral Observation".
Mr. Qiming Xu, Chairman and Chief Executive Officer of Xiniya, commented, "We continue to invest in our brand to increase our recognition and customer acceptance. We are very excited to add this initiative to our marketing campaign since it directly targets our core customer base. We are again pleased to have Jacky Cheung represent the Xiniya brand on national television. We anticipate our brand awareness will continue to grow throughout China as our advertising activities increase."
The achievement of scientific research and innovation in Hong Kong has been profoundly recognized, the scientific talents in Hong Kong won six awards in the 2010 State Science and Technology Awards in Beijing. To further encourage the innovation and technology development in Hong Kong, the Hong Kong Research Institute of Textiles and Apparel (HKRITA) will hold the Innovation and Technology Symposium at Hong Kong Science Park on 12th - 13th April 2011.
The symposium aims to present the latest research achievement of HKRITA and provide an interactive platform for the counterparts in the industry to understand the recent development of scientific and technological undertakings.
The Innovation and Technology Symposium 2011 will be officially opened by Mr Andrew Lai, Deputy Commissioner for Innovation and Technology of the HKSAR Government and Dr Harry Nai Shee LEE, HKRITA Chairman. In order to facilitate the technology exchange between the mainland China and Hong Kong textile industry, Mr YANG Donghui, the Vice President of China National Textile and Apparel Council and Prof JIANG Gaoming, the Director in the Ministry of Education of Jiangnan University, will introduce the industry technology roadmap and the latest innovation development of China in the keynote sessions.
HKRITA has impelled the development of R&D projects and successfully applied the technology to the local clothing industry since 2006. The Innovation and Technology Symposium 2011 will showcase the success of HKRITA projects in novel technology and textiles, innovative functional fabric and clothing, and energy saving.
