China Dongxiang Announces Operational Results for FY2020/21 Q1

July 17, 2020 - 11:10
China Dongxiang Announces Operational Results for FY2020/21 Q1

Offline Retail PerformanceStarts Picking Up

E-commerce Sales Continuesto Grow

HONG KONG, CHINA - MediaOutReach - 17 July2020 - Theleading international sportswear brand enterprise in the PRC, China Dongxiang (Group) Co., Ltd.("China Dongxiang" or "the Company", together with itssubsidiaries, "the Group", HKEx stock code: 3818) announces its operational results for the threemonths ended 30 June 2020 (''FY2020/21 Q1'').


For the FY2020/21 Q1, the retail performance of Kappa stores(excluding Kappa kids' apparel business and Japan business) for the overallplatform registered a mid-to-low single-digit decrease on a year-on-year basis,of which the offline business recorded a low-teen decrease and the e-commercebusiness recorded a mid-to-low thirties growth. Offline retail performance inMay 2020 recorded a low-single-digit growth as compared with that in April 2020 due to on-going market recovery. Retail discount hasdropped by 4 percentage points as affected by the market, with discount rate still under the controllable range.


As for the same-store-sales ("SSS") during FY2020/21 Q1, in respectof Kappa stores (excluding Kappa kids' apparel business and Japan business)which have been in operation since the beginning of the same quarter theprevious year, the SSS for the overall platform registered a mid-single-digitdecrease on a year-on-year basis, of which the offline business recorded amid-to-low-teen decrease, while the e-commerce business recorded a mid-to-lowthirties growth.


For the first quarter ended 30 June 2020, the number of Kappa-branded stores of theGroup was 1,147 (excluding Kappa kids' apparel business and Japan business),representing a net increase of 18 as compared with that as at 31 March 2020(the end of FY2019/20). In the next step, the Group will continue to close inefficientstores.

Mr. Zhang Zhiyong, CEO,President and Executive Director of China Dongxiang, said, "Market competition has been intensified since the outbreak ofCOVID-19. We anticipate that there will be a year-on-year volume growthin sports apparel and equipment industry this year, though selling prices will be underpressure. Entering the third year of 'direct-franchise' model reform for Kappa brand, the Group's inventory level is expected to decline. By implementing such business reforms, themarket share of Kappa brand has been maintained during the period. In addition, our management has improved and implemented localised strategiesfor the sales teams in an orderly manner, while driving reforms andconstruction of  the product team, with an aim to enhance core competitiveness of the brand. We will continue to closely monitor the changes ofthe pandemic, strengthening supervision and control over our operations, in order to minimise the negative impacts brought by the pandemic,protecting the Group's value and shareholders' interests."


About China Dongxiang (Group) Co., Ltd. (Stock code: 3818)

China Dongxiang (Group) Co., Ltd. is a leading international sportswearbrand enterprise in China which has been listed on the Main Board of the HongKong Stock Exchange since 10 October 2007. The Group is primarily engaged inthe design, development, marketing and wholesale of branded sportswear inChina. Currently, China Dongxiang owns all rights to the internationallyrenowned Kappa brand in China, Macau and Japan. On 1 May 2008, China Dongxiangcompleted the acquisition of Phenix, a Japanese sportswear enterprise. Phenixis the most popular ski brand in Japan with the largest market share, as wellas a well-known brand in the international market.