Fila brand a winner for Chinese sportswear retailer Anta as first-half profit jumps 34 per cent
The company has been marketing the venerable former Italian brand to China’s youth
Anta Sports Products, China’s largest sportswear maker, posted a 34 per cent jump in first-half profit on Tuesday, driven by strong sales of Fila brand goods that the company has been aggressively marketing to the younger generation.
The firm’s net profit rose to 1.9 billion yuan (US$276 million) in the first six months of this year from the same period last year. Revenue grew 44 per cent to 10.6 billion yuan, beating the forecast of 9.6 billion yuan by analysts polled by Bloomberg.
Anta took over the venerable, former Italian brand’s business in mainland China, Hong Kong and Macau in 2009.
Efforts in marketing Fila to younger customers paid off, the firm said. Fila signed popular teenage star Roy Wang as brand ambassador in June, and has collaborated with New York-based fashion designer Jason Wu, who was known for creating the dress worn by former US first lady Michelle Obama during her husband’s first inauguration.
“Fila had explosive growth in the first half of this year,” said James Zheng, executive director and group president of Anta. It launched a new sportswear series called Fila Fusion in June to target trendier shoppers and also opened two flagship stores in Shanghai in May.
Overall apparel sales jumped 65 per cent to 6 billion yuan, accounting for 58 per cent of the revenue, up from 50 per cent last year. Footwear revenue rose 21 per cent to 4.1 billion yuan, accounting for 39 per cent of the revenue.
Zheng also said that sports products benefited in the first half from steady growth in China’s economy and a strong consumer goods market. Government plans to boost funding for the development of sport to 5 trillion yuan by 2025 from 1.9 billion yuan in 2016 also helped, he said.
The Fujian-based firm plans to expand its eponymous main brand into more shopping malls and department stores from its existing street stores to further penetrate the market, Zheng said.
It expects the Anta brand’s network of 9,650 stores across China to reach up to 9,800 by the end of this year, while adding another 100 to 200 stores to the 1,248 Fila network.
Anta’s accounting practices were questioned by Hong Kong-based accounting research firm GMT Research in a June 12 report. Anta said the allegations were groundless. Its stock price fell 12 per cent from June 13 to 15.