Sales at Greater China’s largest distributor and retailer of branded athletic and outdoor footwear and apparel slowed again in September.
Pou Sheng International Holdings Limited, which sells sports performance and lifestyle apparel and footwear through more than 6,000 points of sale in mainland China, Taiwan and Hong Kong, reported net consolidated operating revenue grew 10.0 percent to $205.3 million in September compared with September 2014. That brought down the year-to-date growth rate to 19.9 percent compared with 21.2 percent Pou Sheng reported for the eight months ended Aug. 31, 2015.
Pou Sheng continued to grow much faster than its parent company Yue Yuen Industrial (Holdings) Limited, where net sales grew 5.7 percent to $6.28 billion in nine months ended Sept. 30 compared with the first nine months of 2014.
Yue Yuen is the world's largest manufacturer of branded footwear, including Nike and Adidas.
Pou Sheng specializes in helping global athletic and sporting goods brands enter the Chinese market through a network of more than 6,000 owned and franchised points of sale across China, Taiwan and Hong Kong. In addition to operating mono-branded stores under license from such brands as Adidas, Asics, Columbia, Converse, Ked's, Li-Ning, Mizuno, Nike, Oakley, O'Neill, Reebok, Rockport and Sperry Top-Sider, Pou Sheng is pioneering the multi-brand store concept in mainland China. It is also seeking to rapidly expand distribution of outdoor performance brands.
Like many Chinese distributors and retailers, Pou Sheng shifted its focus in recent years from opening new outlets to making existing outlets more profitable. While this has slowed top line growth, it allowed the company to return to profitability in the second quarter of 2014.
In late September, Nike Inc. reported EBIT from its China operations vaulted 51.4 percent to $330 million due to a 30 percent increase in sales of the Nike brand, gross margin expansion, and SG&A leverage. The results prompted CFO Andy Campion to say Nike Inc.’s China business had never been stronger.
Yue Yuen and Pou Sheng are expected to release their full financial results for the nine months, including earnings and margins, in mid-November.
