Friday, March 29, 2024
 
Columnist
Martin Hennecke
 
S. CULTURE
HKEx Stock Code : 01255 
 
Corporate Profile
As an established distributor and retailer of lifestyle comfort footwear products, the Group relies substantially on the sales of Clarks branded footwear products supplied by C&J Clark which was its largest supplier during the Track Record Period. The Group's total revenue generated from its sale of Clarks branded footwear products amounted to approximately HK$296.0 million, HK$400.9 million and HK$404.4 million for the three years ended 31 December 2010, 2011 and 2012, respectively, which accounted for approximately 80.9%, 84.8% and 80.0% of its total revenue for the relevant periods, respectively. Furthermore, C&J Clark granted licences to the Group to use certain trademarks such as Clarks, in connection with its sale of footwear products supplied by it. The Group's customers' loyalty to its products, and its sales volume and revenue, rely to a certain extent, on the market's recognition and awareness of the brand of Clarks.

In addition to Clarks branded footwear products, the Group distributes and sells lifestyle comfort footwear products of other international brands, including Josef Seibel , The Flexx and Yokono in Hong Kong, Taiwan and Macau. With an operating history of over 38 years in Hong Kong, the Group has developed and maintained strong and successful relationships with its suppliers of international branded footwear products.

During the Track Record Period, the Group was the exclusive distributor in Hong Kong, Taiwan and Macau for most of its licensed brands, including Clarks, Josef Seibel, the Flexx and Yokono, and its exclusive distributorship extends to the PRC or other Asia countries for several licensed footwear brands, including Josef Seibel and Yokono. The Group is not required to pay any fees to any of its existing suppliers for obtaining or renewing its distributorship or franchise.

The aggregate net proceeds from the Global Offering (after deducting underwriting fees and estimated expenses in connection with the Global Offering and assuming an Offer Price of HK$1.82 per Share, being the mid-point of the indicative Offer Price range of HK$1.51 to HK$2.13 per Share, and assuming the Over-allotment Option is not exercised) will be approximately HK$75.0 million. The Directors intend to apply the net proceeds from the Global Offering for opening new Retail Outlets in the PRC. The Group intends to introduce its Josef Seibel branded footwear products in Shanghai by establishing around four concessions in the year ending 31 December 2013 and to expand its retail network to other provinces or cities in the PRC by establishing an additional of approximately (i) 12 concessions in the year ending 31 December 2014; and (ii) 15 concessions in the year ending 31 December 2015. It is currently estimated that for the establishment of each concession for the year ending 31 December 2013, approximately HK$100,000 will be used for interior design and fitting-out, approximately HK$150,000 will be used for the initial inventory, and approximately HK$50,000 will be used of other miscellaneous initial expenses, and the costs for opening each concession for the years ending 31 December 2014 and 2015 is adjusted based on an assumed increase in costs by 10% per year. For opening new Retail Outlets in Hong Kong and Taiwan. For Hong Kong, the Group intended to open an additional of approximately (i) one concession and three self-rented shops in the year ending 31 December 2013; (ii) one concessions and three self-rented shops in the year ending 31 December 2014; and (iii) two concessions and four self-rented shops in the year ending 31 December 2015. For Taiwan, the Group intended to open an additional of approximately (i) four concessions in the year ending 31 December 2013; (ii) seven concessions in the year ending 31 December 2014; and (iii) 10 concessions in the year ending 31 December 2015. For Hong Kong, it is currently estimated that for the establishment of each concession for the year ending 31 December 2013, approximately HK$200,000 will be used for fitting-out, approximately HK$150,000 will be used for the initial inventory, and approximately HK$10,000 will be used of other miscellaneous initial expenses, and the costs for opening each concession for the years ending 31 December 2014 and 2015 is adjusted based on an assumed increase in costs by 5% per year. For Hong Kong, it is currently estimated that for the establishment of each selfrented shops for the year ending 31 December 2013, approximately HK$455,000 will be used for fitting-out, approximately HK$265,000 will be used for the initial inventory, and approximately HK$100,000 will be used of other miscellaneous initial expenses, and the costs for opening each self-rented shop for the years ending 31 December 2014 and 2015 is adjusted based on an assumed increase in costs by 5% per year. For Taiwan, it is currently estimated that for the establishment of each concession for the year ending 31 December 2013, approximately HK$100,000 will be used for fitting-out, approximately HK$150,000 will be used for the initial inventory and approximately HK$50,000 will be used of other miscellaneous initial expenses, and the costs for opening each concession for the year ending 31 December 2014 and 2015 is adjusted based on an assumed increase in costs by 8% per year. To settle outstanding amounts due to existing Shareholders (including dividend of HK$20 million declared and remaining balance of amounts due to related parties) and amount due to immediate holding company; for renovating its Retail Outlets in Hong Kong and Taiwan; for upgrading its information technology systems; (vi) approximately HK$3.8 million, representing approximately 5.0% of the net proceeds will be used for revamping its logistics facilities in Hong Kong and Taiwan; for marketing and promotion; and (viii) the remaining balance of approximately HK$2.5 million, representing 3.5% of the net proceeds, will be used for additional working capital and other general corporate purposes.
Chairman Chong Hot Hoi Issued Capital (shares) 200M
Par Value HKD 0.01 Market Capitalisation (HKD) 380M
 
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