Sunday, April 18, 2021
 
Columnist
Martin Hennecke
 
C.BANNER
HKEx Stock Code : 01028 
 
Corporate Profile
Principally engaged in the manufacture and sale of branded fashion footwear.

Business Review - For the year ended December 31, 2012

The Group operates under a vertically integrated business model, which includes the design and development, outsourcing, manufacturing, marketing, wholesaling and retailing of shoes. It is the second largest retailer of middle-to-high-end women's formal and leisure footwear in the PRC, according to a Euromonitor report.

The Group also acts as an OEM or ODM manufacturer for international shoe companies operating in overseas markets.

The Group manages four self-developed brands ˇV C.banner, EBLAN, sundance and MIO. The Group also sells women shoes through a licensed brand called naturalizer.

During the year under review, the Group has sought to maximize shareholder value through the following initiatives:

Well-established and expanding presence across all major and regional markets

The Group's self-developed and licensed brands are mainly distributed through a network of proprietary retail outlets in department stores in PRC's first, second and third-tier cities. It also wholesales its selfdeveloped brands through authorized distributors.

Despite the more challenging business environment in 2012, the Group added a net 245 proprietary retail outlets and 173 third-party outlets during the year under review. As of 31 December 2012, it oversaw a network of 1,556 proprietary retail outlets and 610 third-party outlets across PRC ˇV maintaining a strong presence in over 31 provinces, municipalities and autonomous regions.

Sales volume during the year was in line with expectations, with same-store sales growing by 6.27% during the year, as the Group continued to improve the operation efficiency and layout of its stores to retain and win customers.

Expansion of brand portfolio

The Group continued to add more retail brands during the year, in order to enter new product markets, diversify its footwear offerings and broaden its customer base. It launched a new self-developed brand, MIO, in the first half of the year. Targeting the premium end of the market, MIO offers a range of trendy and high-quality women's footwear, retailing at between RMB800 and RMB3,000 per pair. As of 31 December 2012, MIO was available at 23 of the Group's proprietary outlets and 113 third-party outlets.

The Group also prudently considered opportunities to acquire the trademarks of internationally recognized brands to further diversify its retail offerings, particularly in PRC's first-tier cities, as well as introduce new types of products such as leather goods.

Focus on proprietary brands

The Group continued to invest in maintaining separate design teams for each of its self-developed brands throughout the year, ensuring that each brand's products remain fresh and in line with the latest fashion trends, as well as maintaining their own distinctive look and character. Based at the Group's research and development centre in Foshan, Guangdong province, each team comprises experienced brand directors, design managers and designers.

The Group continued to scale back its OEM business in order to allocate more manufacturing capability for its proprietary brands. It also acquired a 51% stake in Mega Brilliant International Limited (ˇ§Mega Brilliantˇ¨), a designer and outsourcing and sale of leather products and textiles, in the first half of 2012 in order to expand its women's footwear operations.

Addition of strategic investors

The Group attracted strategic investments from three leading private equity investors in the first half of 2012, in recognition of its impressive growth record. The three firms, China Consumer Capital Fund, L.P., China Champion Holdings Limited (an investment vehicle owned by funds advised by CVC Capital Partner) and MousseDragon, L.P. subscribed for a collective RMB189.0 million worth of convertible bonds issued by the Company. The proceeds from convertible bonds issue are used for general working capital and new initiatives for the Company and its subsidiaries.

The introduction of strategic investors is to improve the Group's retail operational capabilities expand brand portfolio and explore potential mergers and acquisitions or cooperation opportunities in the footwear industry.

Business Outlook - For the year ended December 31, 2012

Looking forward, 2013 will be another challenging year with slow global economic recovery likely to remain a dampener on Chinese consumer confidence. However, the Group is still reasonably confident about the outlook for the Company as China's growing economy and ongoing rural urbanization policy continues to create new markets for footwear products.

The Group will continue to implement multi-brand strategy, in order to expand its market share in PRC's middle-to-high-end footwear product market through increasing the sale of its proprietary brands and cooperating with other brands. The Group will continue to diversify its product offering to meet customers' needs.

As domestic consumer wealth increases, the Group intends to open at least 200 proprietary outlets and at least 100 third-party outlets in the coming year, primarily in PRC's third and fourth-tier cities, in order to grow market share. In addition, it will work with third-parties to create an online platform for the electronic sale of its products to further expand its customer base.

The Group will maintain the existing production capacity for its OEM business in 2013. At the same time, the Group will capture better returns by optimizing the product mix towards high-end brands.

It will also continue to seek opportunities to grow its business through selective acquisitions, such as its recent purchase of trademark rights, as well as providing high quality footwear to its customers and to generate greater values for its shareholders.

Source: C.banner Int'l (01028) Annual Results Announcement
Chairman Chen Yixi Issued Capital (shares) 2,000M
Par Value USD 0.015 Market Capitalisation (HKD) 5,520M
 
Login
Password
Register  Forget Password
Advanced Search
© 2021 The Standard, The Standard Newspapers Publishing Ltd.
Home | Business | Metro | Focus | Opinion | Markets | World | Sports | Entertainment | Monday Money | Property | Macau | Weekend