How Should We Change The Path Of Garment Segmentation Industry?

Shoes are for walking.

But the manufacturers and retailers of footwear and especially retailers have gone a little muddy in the past year.

From the recent earnings report of about 15 shoe and garment enterprises listed on A shares and Hong Kong stocks in recent years, the revenue is basically on the decline, flat or slightly increasing.

Among them, there are relatively large scale of revenue and more concerned Hong Kong shares listed footwear companies such as BELLE international and Daphne international.

The footwear business continued to be weak.

BELLE International released the retail business data and profit warning for the fourth quarter of 2016/17 in the evening of March 19th, announces that for the first time in 10 years, the group has recorded a continuous decline in profits.

The announcement said BELLE international fell 6.2% in the fourth quarter of the 2016/17 fiscal year ending February 28, 2017, and the board expected that the profit attributable to the holders of the financial performance would be reduced by about 15% to 25%.

For the 2016-2017 fiscal year, profits continue to fall sharply, BELLE international will be attributed mainly to the continued weakening of footwear business, resulting in impairment of related business goodwill, while other intangible assets are expected to be impaired; otherwise,

Weak performance, gross profit and operating profit declined year-on-year.

BELLE international also said that the decline in profits was related to the adjustment of management incentive plan implemented by the group in May 26, 2014, and the related expenses increased considerably in the last fiscal year.

International losses continued to expand in 2016.

The company's year-round results ending December 31, 2016 on March 28th night showed that the company's turnover was HK $6 billion 502 million, a decrease of 22.4% compared to the same period last year, and the loss attributable to shareholders of the company was HK $819 million, a loss of HK $379 million in the same period last year, and a loss of HK $0.497 per share, not paying dividends.

According to the announcement, the decrease in turnover was mainly due to the sharp decrease in the number of sales outlets and the negative growth in same store sales, leading to a decline in core brand business turnover.

In addition, gross margin declined to 50.9% (2015: 56.4%), mainly due to the increase in sales of heavily discounted goods over the past quarter, resulting in a decline in gross margins.

According to the announcement, in 2016, the group accelerated the integration of stores and reduced 1030 sales points. In December 31, 2016, the total sales point of the group was 4900, including 4598 sales outlets of core brand businesses and 302 sales outlets of other brand businesses.

In addition, the retail business performance of Hong Kong listed companies such as Qian Baidu, Lies Dan, Ying Jin group (now renamed group of state owned Holdings) is also difficult to achieve.

The 2016 annual results released in March 31st showed that the company's revenue reached 3 billion 207 million yuan in the year ended December 31, 2016, an increase of 5.3% over the same period last year, and the profit attributable to shareholders of the company was 206 million yuan, a decrease of 19.9% compared with the same period last year. The gross profit margin was about 60.4%, a decrease of 0.7 percentage points compared with the same period last year.

The announcement shows that in 2016, the retail and wholesale revenue of the company was 2 billion 332 million yuan, a decrease of 11.8% compared with the same period last year. The main reason for the decline in retail and wholesale revenue was the decrease in the same store sales and the closure of inefficient shoe shops.

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