HONG KONG: Yue Yuen Asian sales overtake US exports
Sales from domestic Asian markets have become the top revenue stream for Yue Yuen Industrial (Holdings) Ltd, the world's largest athletic footwear maker, overtaking its exports to the US for the first time.
The company, which produces footwear for both Nike and Adidas, boosted its profit 23.4% to US$209.3m for the six months to 31 March, despite reporting adverse conditions in the manufacturing industry as a whole.
Turnover increased year-on-year by 21.8% to $2.3bn, which it attributed to ongoing consolidation in the footwear manufacturing industry and solid performance in its Greater China wholesale and retail operations.
Retail sales accounted for 16.0% of total Yue Yuen sales, compared to 10.7% last year.
With the surge in retail sales, Asia has its largest market with turnover distribution among three major markets, the US, Europe and Asia, becoming more balanced.
By geographical market, Asia represented 37.8% of sales, overtaking the US which was responsible for 31.2% of revenues having been Yue Yuen's top performing market last year.
The total volume of shoes produced by the company rose by 15.1% year-on-year to 127.8m pairs and the group has added 32 new production lines over the last six months - bringing its total number of lines to 430 by the end of March 2008.
Yue Yuen said that sales from its wholesale and retail operations in Greater China accounted for about 16% of the group's total turnover for the interim period.
Sales jumped 81.5% year-on-year to $370.6m, mainly derived from its 1,694 directly operated retail stores/counters. In addition, the group's associated companies operated about 2,187 directly operated retail stores/counters.
By product category, athletic shoe sales jumped 21.1% to reach US$1.33bn, while casual shoes fell 1.6% and sports sandals fell 10.4%.
In the first two months of the third quarter the group's total turnover rose to $875.2m, an increase of 22.6 % year-on-year, the company said.
In its outlook Yue Yuen said that sales growth for the footwear and China retail operations should continue to benefit from consolidation in manufacturing activities and consumer spending in China.
Earlier this month the group, which has production bases in China, Vietnam and Indonesia, listed its Greater China wholesale and retail operations on the Hong Kong Stock Exchange under the name Pou Sheng International.
"The group continues to satisfy the needs of its brand name customers despite the challenging environment," said chairman Tsai Chi Neng.
"The wholesale and retail operations in the Greater China region under Pou Sheng should continue to be growing in the times ahead."
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