World Footwear

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Yue Yuen’s sales down by 16% in 2020

Mar 28, 2021 Hong Kong
Yue Yuen’s sales down by 16% in 2020
During the year under review, the group recorded revenue of 8.44 billion US dollars, representing a decrease of 16.4% compared with the previous year. The fall in revenue was mostly attributed to the impact of the COVID-19 pandemic

Revenue by Product Category

In the year ended on the 31st of December 2020, revenue attributable to footwear manufacturing activity (including athletic shoes, casual/outdoor shoes and sports sandals) decreased by 21.3% to 4.37 billion US dollars, compared with the previous year, whereas the volume of shoes shipped decreased by 24.2% to 244.4 million pairs. The decrease was mostly due to delayed shipments, as well as adjusted and cancelled order books from customers in response to lower consumer demand resulting from COVID-19, despite recording a sequential improvement the fourth quarter compared with previous quarters of the year.

The average selling price increased by 3.8% to 17.89 US dollars per pair, as compared with the previous year, which was primarily due to the "resilient demand for high-end categories in the group’s product portfolio".

Yue Yuen’s total revenue with respect to the manufacturing business (including footwear, as well as soles, components and others) totalled 4.74 billion US dollars in 2020, representing a decrease of 21.1%, as compared to the previous year.

In the year ended December on the 31st of 2020 revenue attributable to Pou Sheng, the group’s retail subsidiary, decreased by 5.7% to 3.71 billion US dollars, compared to 3.93 billion in the previous year. This reflects the impact of several control measures implemented by the Chinese government to contain the spread of COVID-19, which resulted in the temporary closure of Pou Sheng’s brick-and-mortar stores between Lunar New Year and mid-March 2020. According to the group, this was "largely mitigated" by the rapid growth of its omni-channel business and a progressive recovery in sales starting from the second quarter of 2020. As of the 31st of December 2020, Pou Sheng had 5 240 directly operated retail outlets and 3 835 stores operated by sub-distributors across the Greater China region, representing a net closure of 758 stores as compared with the same period of 2019.

Gross Profit

In fiscal 2020, the group’s gross profit decreased by 27.1% to 1.83 billion US dollars. The gross profit margin of the Group’s manufacturing business contracted by 3.8 percentage points to 14.7%, as compared to the previous year. The decrease in the gross profit margin for the manufacturing business was  primarily driven by "reduced capacity utilization and the decrease  in revenue".

The loss attributable to owners of the company totalled 90.8 million US dollars, compared to a profit attributable to owners of the  company of 300.5 million  US dollars in the previous  year.

The Board has resolved not to declare a final dividend for the year ended on the 31st of December 2020 (in 2019: dividend was 0.70 US dollars per share): "the Group is inclined to preserve more cash momentarily until the global economy has recovered further and the Company's profitability has stabilized".

Image credits: Headway on Unsplash

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