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361 Degrees Announces Operational Highlights for the Second Quarter Ended 30 June 2012

2012-07-18 17:08 1803

HONG KONG, July 18, 2012 /PRNewswire-Asia/ -- 361 Degrees International Limited ("361 Degrees" or the "Company", together with its subsidiaries, the "Group"; HKSE stock code: 1361), one of the leading sports brand enterprises in China, is pleased to announce the following operational highlights for the second quarter of 2012:

  • The same store sales growth for stores in operation for more than 24 months was 5.1%
  • At 30 June 2012, the channel inventory, including that of distributors and retailers, was 4.3 months
  • The franchised network increased to 8,050 stores at the end of June 2012, with a net increase of 100 stores for this quarter

The second quarter of 2012 saw a continuing weak market, characterized by falling demand for apparel and keen competition from all major brands in the industry. Discounting continued to be a dominant feature of this industry and adverse weather conditions also affected sales in various parts of China.

The same store sales growth figure of 5.1% was obtained from data downloaded from 3,458 stores across the country which had been in operation for more than 24 months. This growth was primarily driven by higher volumes as ASP remained relatively flat. The Group is fortunate that most of its stores are located in smaller towns and the brand is particularly strong in Northern and Western China, where economic growth is still relatively solid.

The channel inventory increased slightly from the last quarter, largely because of heavy deliveries of new products ahead of an anticipated strong selling season in the summer months.

During this quarter, independent retailers reaffirmed their confidence in the future of the brand by opening a total of 183 stores whilst at the same time 83 stores closed due to uncompetitive rents or were replaced by stores in more favourable locations.

The 361 Degrees Kids franchise, which is run as a separate and independent business, continues to show commendable progress and during the quarter, a further net 181 stores were added, bringing the total to 1,439 at the end of June 2012.

The market outlook remains dim, plagued by the accumulation of heavy inventories in several major brands and destocking will continue to cast a negative pall over the industry. The Group is currently conducting its 2013 Spring/Summer Trade Fair and the response from the retailers has been very encouraging. In this difficult trading period, the Group maintains a vigilant control over its operating costs, whilst it continues to invest sensibly in product innovation and branding with a strong conviction that it will continue to outperform its peers because of the relatively fresh vigour of the brand.

About 361 Degrees International Limited

361 Degrees International Limited is one of the leading sports brand enterprises in China, possessing brand marketing, research and development, design, manufacturing, distribution and retail capabilities. The Group's products include footwear, apparel, accessories and equipment for sport and leisure uses. The Group has established an extensive supply chain management system through proprietary and sub-contracted manufacturing operations; and an exclusive distribution and retail network in China through distribution via authorized distributors.

For further information, please contact:

Mr. Y F Chen
Vice-President, Investor Relations
361 Degrees International Limited
Email: yuanfeng@361sportshk.com 
 
iPR Ogilvy LTD. 
Natalie Tam/ Charis Yau/ Summer Si/ Janis Lai
Tel: (852) 2136 6182/ 2136 6183/ 2136 6953/ 2169 0646
Fax: (852) 3170 6606
Email: natalie.tam@iprogilvy.com / charis.yau@iprogilvy.com /
  summer.si@iprogilvy.com / janis.lai@iprogilvy.com 
Source: 361 Degrees International Limited
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