Hat-maker's double play scores homer in Europe
Popularity of New York Yankees baseball team revives sales of Mainland Headwear
The Europeans' love of the American baseball team the New York Yankees is coming to the rescue of Hong Kong-listed hat maker, Mainland Headwear Holdings.
Mainland Headwear revenues, which suffered a blow in the first half of last year when the company lost its licence to sell Major League baseball caps in the United States market, have bounced back as a result of a surge in European sales of the distinctive headgear.
Europe's contribution to Mainland Headwear's turnover will double to 22 per cent at the end of this year from 11 per cent in the middle of last year, said deputy chairman Pauline Ngan Po-ling.
'Since the opening of our European headquarters in London in March last year, our people are able to design hats to suit the European taste,' said Mrs Ngan.
'In Europe, 65 per cent of our caps carry the New York Yankee logo. In France and Germany, you see lots of youths wearing New York Yankee caps. In Europe, the New York Yankees have become a desirable brand.'
The company retained a licence issued by US Major League Baseball to sell branded goods in Europe but lost the licence to do so in the US in the first half of last year.
Mrs Ngan is now hopeful that revenue will grow by double digits this year after a 12.4 per cent drop in revenue to $233.75 million in the first half of last year, mainly due to the loss of the MLB licence.
Brokerage house 3V Capital projected Mainland Headwear's revenue for the whole of last year would drop 2.5 per cent to $543 million but rise 14 per cent to $620 million this year. Net profit, it forecast, would fall 3.6 per cent to $80 million for 2005 and rise 15 per cent to $92 million this year.
'Despite a slightly disappointing first half of 2005, much improvement is expected for the second half for the manufacturing operation. The increase in the share of profit from Europe will see a 25 to 30 per cent rebound in second half 2005 overall turnover,' said a 3V Capital report. Retail demand, it said, would become a new growth driver for Mainland Headwear.
Retail's contribution to Mainland Headwear's turnover will jump to 20 per cent at the end of this year from 3.7 per cent in the middle of last year, said Mrs Ngan.
Mainland Headwear has LIDS hat stores in Hong Kong and the mainland as well as Hello Kitty stores in the mainland.
In December, Mainland Headwear gained a 10-year exclusive licence to sell hats and other accessories bearing the UK brand Kangol in China.
The company will open its first Kangol store in Shanghai next month.
'It's healthier for our company's development to have a more diversified revenue base,' said Mrs Ngan.
