361 Degrees to ramp up expansion after H1 profit climbs 19%
Updated: 2011-02-23 06:48
By Joy Li(HK Edition)
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361 Degrees International Ltd plans to add as much as 1,000 new sales outlets this year to meet rising demand for its products, the mainland-based sportswear maker said on Tuesday after reporting 19 percent growth in net profit for the first half of fiscal year 2010-2011.
For the six months ended December 2010, net profit rose 18.5 percent to 442.8 million yuan compared with the same period in the previous year, as sales grew 29.5 percent to 2,275.4 million yuan on higher average selling prices (ASP) as well as an expanded sales network.
The gross profit margin for the period improved by 4.4 percentage points to 44 percent as a result of higher ASP and lower outsourced costs from suppliers, said the company in a statement.
"As the top-level sponsor for the Guangzhou Asian Games, we received very positive customer response which was very conducive to our brand awareness," said Ding Wuhao, president and executive director of 361 Degrees.
In the six months of the interim period, the company added 336 outlets to its sales network, pushing up the total number to 7,262 nationwide. Aside from adult-wear stores, the company also entered the kids-wear market at the beginning of 2010, opening 487 outlets by end-December. The newly-added product line contributed 5.5 percent, or 124.3 million, to group revenue during the interim period.
Ding said 361 Degrees is aiming at adding as much as 1,000 sales outlets in 2011, wishing for a mix of 600 to 800 adult-wear stores and 300 kids-wear stores. In 2010, the company added 872 retail outlets.
"We shall plough resources to develop the 361 Degrees Children's Collection. The group continues to believe that this collection will become a major driver for the group going forward," said Ding. He said this new collection is "going as planned", and is confident that its turnover in 2011 will double.
Chen Yongling, head of capital operations, said the order books for 2011 are strong, which will underpin revenue growth for the year.
During the order-taking fair held in December 2010 for the autumn season of 2011, 361 Degrees booked 10 percent more orders for its apparel products and 8 percent more orders for its footwear products in volume terms compared with a year ago - with the ASP rising 13 percent and 12 percent, respectively, the company said.
In an earlier fair held in August 2010, the company struck 11 percent and 15 percent more orders for its apparel products and footwear products, respectively, for the spring/summer season of 2011 compared with a year ago, with the average selling price rising 9 percent and 4 percent respectively.
Virginia Choi, chief financial officer at 361 Degrees, said that since the rising cost of raw materials reared its head in October 2010, orders booked at the August fair were not affected. For orders booked at the December fair, Choi said the company has lowered discounts to distributors to offset the negative impact of rising costs.
361 Degrees' share price closed Tuesday at HK$5.42, down 1.275 percent in Hong Kong trading.
China Daily
(HK Edition 02/23/2011 page2)