Shoe retailer and Hamleys parent C.banner International survived a “challenging year” to post an increase in sales and gross profit.
Chairman Chen Yixi said that with more than 2000 shoe stores across the mainland, the Hong Kong-listed company was able to “ride on China’s wave of growth in the footwear industry”, as well as pursue global expansion through Hamleys, one of the largest toys retailers in the world, which it acquired in last year.
“Despite a multitude of challenges such as adverse operating conditions, fierce market competition and shift of consumption behavior to e-commerce, C.banner launched two women’s footwear brands, including famous Badgley Mischka brand, to further diversify the brand portfolio and to offer high quality products with differentiated and unique features, making the Company stand out in the domestic footwear market characterized by a high degree of homogeneity.
In the year to December 31, the group’s total revenue increased by 5.3 per cent year-on-year to RMB3.207 billion. Gross profit increased by 3.9 per cent to RMB1.936 billion and the gross profit margin was 60.4 per cent. Pre-tax profit was RMB278.7 million.
“The year of 2016 was a challenging year for the footwear industry mainly due to stagnant global economic growth coupled with weak growth and subdued inflation rate of major advanced economies,” said Chen. “However, with C.banner’s strong presence in the footwear business in China, the company is well positioned to benefit from the continuous stable economic growth of China and a wide range of initiatives and policies taken by the Chinese government, such as Supply-side Structural Reform.
At the end of the year, C.banner had 1697 stores of its own and 417 third-party outlets, covering the majority of first, second and third tier cities.
The group’s self-developed and licensed shoe brands are primarily distributed through a broad network of proprietary retail outlets in department stores and it also sells its self-developed brands through authorised distributors.
Its new Hamleys business had 32 proprietary stores and 73 franchised stores across the globe at the end of the year, including the first Hamleys China flagship store, which successfully opened in Nanjing in October 2016. Revenue from toy retailing totalled RMB624.8 million.
“Looking into the future, by leveraging C.banner’s retail expertise in China and its long-term cooperation with retail channels, the group could rapidly expand the Hamleys business in China through the shared retail platform,” said Chen.
“C.banner firmly grasps the opportunity of the second-child policy in China which will greatly stimulate consumer demand for toys and children’s products and replicates the unique in-store experience of Hamleys, meanwhile, the group also cooperates with large domestic department stores and shopping malls and opens Hamleys-themed shopping malls in other populous cities in China, by utilising Hamleys as the springboard to pursue international expansion under the global branding strategy to forge C.banner as a world-renowned brand.”