Date
20 August 2017
Belle chief executive Shen Baijiao (left) says the company is not very optimistic about the long-term market trend. Photo: EJ Insight
Belle chief executive Shen Baijiao (left) says the company is not very optimistic about the long-term market trend. Photo: EJ Insight

Belle International paints grim outlook as China growth slows

The second half of the year will not be as good as the first half for shoe and sportswear retailer Belle International Holdings Ltd (01880.HK) owing to slower growth and economic restructuring in mainland China.

Based on business in August and September, growth in same-store sales is slower than in the first half, said Shen Baijiao, chief executive of Belle International, when the company released its interim results on Tuesday. The company is “not very optimistic” about the long-term market trend.

As China’s economy slows, consumer confidence and spending will weaken. This will have an impact on Belle, Shen said.

A mitigating factor is the demand in the sportswear market on the mainland as more people take to sports.

Belle posted a 7.6 percent increase in profit attributable to equity holders to 2.07 billion yuan (US$339.66 million) for the six months ended August 31.

Revenue growth was 6.6 percent for footwear and 16.8 percent for sportswear and the apparel business, compared with the same period last year.

The footwear business is worse than expected while the sportswear business is better than expected, Shen said.

The footwear segment will not show much improvement in the short term because Belle shoes are mainly sold in department stores which are experiencing slower business growth.

Belle will pay an interim dividend of 15 cents per ordinary share and a special dividend of 25 cents per ordinary share.

“The company has passed a high-growth period and has entered a comparatively lower growth period. We hope to increase the dividend payout so that shareholders will have better returns,” Shen said.

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JH/JP/JL

EJ Insight reporter

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