BELLE'S Attention Should Be Paid To The Popular Radical Expansion Strategy Of Sports Industry.

"Shoe king" Belle Limtied. (1880.HK)

The first quarter of the three quarter was released internationally, as of the 30 third quarter of November, BELLE group.

Same store sales fell by 10.4%, while sports,

Sales in the same store grew by 6%, while the two data were equally poor in the two quarter, indicating that the footwear industry continued to slump, while the popular sports industry showed signs of slowing down.

BELLE international is the largest agent of Nike Nike in China. It is also China's main agent for sports and outdoor products such as Adidas and Cat. The group has all brands with multiple map by BeLLE brand stores.

According to BELLE group, there are 278 stores in the three quarter, but 272 of them are sports and clothing stores, which is also worth noticing by the radical expansion strategy of sports industry.

Over the past year, despite the slowdown in the Chinese economy and the shock of the stock market, most retail enterprises have seen the unfavorable situation of sharp decline in revenues and profits, and the retail enterprises with surplus profits and losses are everywhere. However, due to the unusually hot sports industry, BELLE has made remarkable progress in its medium-term income and profits with its agency brand.

Before the three quarter, BELLE group had been reducing its stores, including the extremely difficult Hongkong market, while the abnormal expansion in the three quarter showed that the group benefited from its sports business and accelerated its capture.

There is no doubt that the sports industry is now the best category in the apparel retailing industry, but this week there have been campaign brand earnings warning.

The three quarter earnings report released by North American yoghurt retailer Lululemon Athletica Inc. (NASDAQ:LULU) on Tuesday showed that the group's stock grew by 71.9%, which was five times the 14.4% increase in sales.

The sportswear industry has always had the problem of inventory cycle. In 2008, the Beijing Olympic Games was the latest cycle. Nike, Nike, Adidas, Puma Puma, Li-Ning Lining and other international sporting goods giants in the post Olympic era were plunged into abyss due to the rapid expansion of the Olympic Games and high inventory prices. The two major groups of Puma Puma and Li-Ning Lining lost huge losses.

According to data analysis, as of the first half of fiscal year August 31st, BELLE group's sports business has already surpassed the footwear business. The medium-term revenues of the two groups are 9 billion 513 million 900 thousand yuan and 9 billion 835 million 700 thousand yuan respectively. However, the two business trends are just thinking. Therefore, BELLE group's expansion business is also in line with business logic, but the expansion will also bring inventory risk. Once the industry is slowing down or the recession cycle, BELLE group may lose growth support, because its footwear business is still no sign of recovery in view of the big market and economic environment.

As of November, 30 BELLE group operated 20506 stores, of which 13710 were footwear, with a net increase of 6, while sportswear stores increased from 6524 to 6796 in the previous quarter.

On Thursday, Belle Limtied. (1880.HK) BELLE international shares fell 0.90% to HK $6.64, so far this year, the stock has fallen by 25%.