Xtep International Holdings (1368.HK)

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Chinese sports brand Xtep to buy owner of U.S.' K-Swiss for $260 million

Reuters
MAY 2, 2019 / 5:41 PM

HONG KONG (Reuters) - Chinese homegrown sports brand Xtep International Holdings Ltd said on Thursday it would buy K-Swiss owner E-Land Footwear USA Holdings Inc for $260 million in an all-cash deal, as it aims to grow into a multi-brand portfolio group.

The Fujian-based sportwear maker has agreed to buy a 100 percent stake in E-Land Footwear from E-Land USA Holdings Inc. and E-Land World Ltd, Xtep said in a said in a filing to the Hong Kong bourse. E-Land Footwear also owns brands such as Palladium, Supra, PLDM and KR3W.

“The board believes that the transaction is an attractive opportunity to invest in a portfolio of global renowned sportswear and lifestyle brands targeting the high-end market segment,” Xtep Chairman Ding Shui Po said in the statement.

The deal will be financed by internal resources and is expected to be completed by the end of July, it added.

More details in https://www.reuters.com/article/us-xtep-...SKCN1S80TF

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Chinese sportswear maker Xtep reports 23 per cent jump in profit as acquisitions, expansion pay off
* First-half profit jumps to US$65.5 million
* Xtep signed NBA basketball star Jeremy Lin as a brand ambassador this month

Louise Moon  
Published: 6:31pm, 21 Aug, 2019

Sportswear maker Xtep International Holdings has joined home-grown rivals in reporting stellar first-half earnings as they benefit from China’s growing sportswear market.

Fujian-based Xtep posted a 23 jump in net profit and revenue for the six months ended June to 463 million yuan (US$65.5 million) and 3.3 billion yuan respectively, according to a filing to the Hong Kong stock exchange on Wednesday.

Rivals 361, Li Ning, and Anta have similarly posted profit gains ranging from nearly 10 per cent to 196 per cent.

Since the start of this year, Xtep – China’s third-largest home-grown sports brand – has gone on a shopping spree for foreign brands. The move, coupled with expansion into different markets and products, has benefited the company.

In March, Xtep announced a venture with Wolverine World Wide to sell its high-end Merrell hiking boots and Saucony athletic shoes in mainland China, Hong Kong and Macau as it looked to enter tier one cities in China, where top international rivals dominate.

In May, it acquired E-Land Footwear, owner of US shoe brand K-Swiss, for US$260 million.

“2019 is an evolving year to us as the kick-off of multi-brand portfolio signifies another milestone of Xtep,” said Ding Shiu Po, chairman and chief executive of Xtep.

He added that aim of the company was to grow into a global sportswear player backed by a multi-brand portfolio.

Boosted by an expanding middle class and government backing, China’s sportswear market size is set to grow 148 per cent from 2019 to 2023, according to data from Euromonitor.

However, international giants Adidas and Nike were still the top sportswear companies in China by market share, but Anta – mainland’s most valuable sportswear brand – and Li Ning, sit just behind in third and fourth place, according to data from Euromonitor. Lower down are Xtep and 361.

Earlier this month, Xtep also made a first push into basketball, signing NBA star Jeremy Lin as an ambassador and breaking away from a sole focus of becoming China’s top running brand. The partnership will include a range of basketball shoes dedicated to Lin.

“We believe, leveraging his reputation, the new products we are going to launch will be well-received by the public. Looking forward, we remain focused on product innovation and enhancing store efficiency to drive organic growth,” said Ding.

The company said it will continue to expand overseas in South Asia, Southeast Asia and the Middle East, having opened 82 new stores in China and overseas so far this year.

It is, however, “cautiously optimistic” about the second half of the year amid global economic uncertainties.

More details in https://www.scmp.com/business/companies/...ump-profit