Chinese footwear retailer Belle International has boosted profit despite sluggish sales in its home market.
First half results released today who a 7.6 per cent rise in net profit in the six months to August 31.
But the company has warned investors sluggish sales lie ahead in a retail climate it describes as tough and under a growing competitive threat from online retailers.
Belle is China’s largest footwear retailer, distributing brands including Puma, Converse, Nike and adidas.
In the first half, its net profit was 2.08 billion yuan, (US$340 million), higher than analysts’ forecasts.
The company’s CEO Sheng Baijiao said in a statement the company was facing a tough battle to maintain sales and market share because Chinese consumers – “foot traffic” – are drifting away from department stores to a rapidly expanding choice of shopping centres and a growing range of online shopping sources.
“In addition to the overall backdrop of weak consumer sentiment, there are also a number of structural factors negatively impacting the business of the group. The traffic issue is unlikely to go away in the near future.”
Belle had 19,546 retail stores in mainland China at the end of September, 56 fewer than at the end of August. Of those, 13,491 are footwear outlets and 6055 sportswear and apparel stores. It boasts a 22 per cent share of China’s footwear market and operates under the brands Belle, Staccato, Teenmix, Tata, Fato, JipiJapa, Joy & Peace and Bata.
The company said same-store sales of footwear fell 2.8 per cent in the last quarter, but sportswear and apparel sales grew 14.4 per cent in the same period.