Belle nets gains from takeovers

[ 2008-9-11 ]


BELLE International Holdings Ltd, China's largest retailer of women's shoes, said first-half operating profit climbed 64 percent after it bought rivals to expand in the world's fastest-growing major economy.

Operating profit rose to 1.14 billion yuan (US$167 million) from 694.2 million yuan a year earlier, the Shenzhen-based company said in a statement to Hong Kong's stock exchange yesterday. Sales jumped 60 percent to 8.23 billion yuan.Belle this year bought Hong Kong's Mirabell International Holdings Ltd in a deal valued at HK$1.57 billion (US$201.32 million), after buying the rights to the Fila Luxembourg trademarks last year.

The retailer, which also sells Adidas, Nike and Puma products, also benefited from demand before the Beijing Olympic Games in August."Acquisitions have made a significant contribution to the company," Ken Lee, a consumer analyst at UOB-Kay Hian Ltd who rates Belle stock "hold," said before the release. "The Olympics also helped the sportswear business and store openings also boosted sales."

China's retail sales rose 23.3 percent in July, the fastest pace in at least nine years, according to government data. Urban disposable incomes increased 14.4 percent in the first half, helping to drive domestic consumption as exports and fixed-asset investment slowed, Bloomberg News said.Belle's sales network increased to 8,355 outlets at the end of June, after adding 2,212 shops, including Mirabell's stores, in the first half. First-half earnings fell to 988.1 million yuan from 1 billion yuan a year earlier, as tax expenses rose and finance income dropped. Belle proposed an interim dividend of 0.03 yuan, the same as a year earlier.

Belle slid 9.8 percent to close at HK$6.23 in Hong Kong yesterday.