Hong Kong-listed Yue Yuen Industrial’s revenue rose 7.2 per cent for the first half year.
The world’s largest manufacturer of athletic, athleisure, casual and outdoor footwear, Yue Yuen makes shoes for a raft of brands, including Geox, Levi’s, Rockport, Carters and Pony. Its subsidiary Pou Sheng operates a network of some 5500 directly operated stores and 3000+ sub-distributor stores predominantly on the mainland.
Profit attributable to owners of the group declined by 41.9 per cent, however this was largely due to comparisons with non-cash items recorded in the same period last year.
Chairman Lu Chin Chu said throughout the half year, the group had faced “unprecedented headwinds”, including operational changes and disruptions associated with the fast-fashion trend, as well as more flexible procurement approaches by brand customers. These factors resulted in more volatile monthly revenue and “much lower order visibility”, he said.
Retail shone for the group in the first half, with revenue attributable to Pou Sheng growing 27.1 per cent to US$1.753 billion, although about 10 percentage points of that increase was due to the strengthening value of the US dollar year on year.
This year, the company is focusing on building up its digital capabilities as its responds to “intensifying competition and omni-channel integration between brick-and-mortar channels and e-commerce channels”.
“The group is in the process of strengthening its market presence and optimising profitability by implementing customer experience-focused initiatives, expanding its omni-channel capabilities and investing in the latest information systems and technologies in order to further digitise its operations and shorten the sales cycle.”
On the manufacturing side, Vietnam remains the company’s main production location, accounting for 46 per cent of volume. Indonesia was next with 37 per cent and Mainland China third, now accounting for just 15 per cent.
The group’s athletic footwear category outperformed all other categories as a result of the global athleisure trend, accounting for 77.9 per cent of footwear manufacturing revenue during the first half of 2018. Casual/outdoor shoes accounted for 20.4 per cent.
