ANTA expects post-Olympic sales to stay strong
Updated: 2008-03-26 06:58
By Kwong Man-ki(HK Edition)
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ANTA Sports, the mainland's largest maker of athletic shoes, said it is planning to acquire an international sportswear brand in its efforts to grab a piece of the post-Olympics business after August.
The Beijing Olympics has boosted the demand of sportswear in general, helping the mainland's two renowned sportswear makers notch excellent results last year. ANTA's net profits jumped 260 percent to 537.8 million yuan, and its rival Li Ning, the mainland's leading apparel-and-accessories retail chain, posted a 60 percent net profit increase to 473 million.
It's clear that the Olympic effect boosted ANTA's revenue last year, as many orders were signed to meet the Games' need.
But what about after the Olympics its over?
ANTA is confident that the demand for sportswear can be maintained and even grow after the Games end.
"People's awareness of sports and health are what the Beijing Olympics brings," Lai Shixian, ANTA's chief operating officer, told China Daily.
He said he doesn't worry about the dimming of the Olympics effect after August, saying that the company will execute an aggressive expansion strategy this year. That includes a net increase of approximately 600 retail outlets.
As of the end of last year, the number of ANTA's retail outlets was 4,716.
"The sportswear-market growth on the mainland will not slow down after the Olympics," Lai predicted, adding that "the growth will be remarkable in two to three years".
Lai said that when people come into money - as is happening in some areas from the mainland's economic boom - the housing sector is the first to see a boost. After that, people tend to purchase household goods such as televisions and air conditioners. Finally, they turn to apparel.
The Olympics, he said, is a catalyst for getting people aware of health and sports. And Lai expects the interest to continue.
Given the upcoming Games, ANTA plans to keep its focus on the mainland this year. But next year, they plan to branch out internally.
"Southeast Asia and Eastern Europe are our targets," Lai said, adding that the company has opened businesses in Singapore, Vietnam and the Philippines. The overseas market contributed 0.8 percent to the company's turnover last year.
"We are looking for distributors in Eastern Europe," he said, noting possible locations as Hungry, Yugoslavia and Poland.
ANTA raised HK$3.17 billion in its initial public offering last July. It plans to use a good portion of that money to make acquisitions.
The budget for acquiring an international brand is $40 million, Lai said, adding that setting a timetable is difficult, but the company would like to make an acquisition this year.
"We are looking to buy a high-end brand to enhance our product line and complement our existing brands," he said.
He named some requirements for the firm's potential target. "It should be an integrated sportswear brand, and one that's already recognized on the mainland."
The shoe-maker is also trying to diversify its product line by increasing its output of sports clothing. Revenue from clothing became more important last year, accounting for more than 40 percent of the company's total sales.
(HK Edition 03/26/2008 page3)