Retail takes off for Sitoy Group
Retail brands including Cole Haan and Kenneth Cole drove a “considerable” contribution to profit for leather goods maker Sitoy Group Holdings during its first half.
Retail revenue jumped by about 111.9 per cent to reach about HK$153.1 million (US$19.5 million) for the six months to the end of December, according to the group’s interim results.
Profit before tax was about $12.8 million compared to a loss of about $4.2 million for the same period a year earlier.
Hong Kong-listed Sitoy says the significant improvement mainly resulted from the increased contribution from licensed brands. The group has eight brands which it sells in Hong Kong and tier one cities in the mainland. Tuscan’s and Fashion & Joy are self-owned brands, with Tuscan’s originating in Italy. The other brands are licensed: A.Testoni, Bruno Magli, Cole Haan, i29, Jockey and Kenneth Cole.
The company’s overall revenue increased by about 17 per cent to about $1.16 billion, gross profit grew by about 15.8 per cent to about $320.5 million, while profit was up about 23.1 per cent to about $143.3 million.
In the current half of the year, Sitoy says it will open about 50 new shops in both Hong Kong and China, including multi-brand stores in landmark retail areas to target younger shoppers.
The group launched its retail business in 2011 with the introduction of Tuscan’s then Fashion & Joy handbags. With a growing demand for fashion goods, the group started enriching its brand portfolio in 2016 by obtaining exclusive distribution rights for global brands in China and Hong Kong.
Not only do the licensed brands provide a new stream of revenue, but also expand its product range from handbags to male and female footwear and apparel products with diversified handbag collections.
To capitalise on its in-house manufacturing, the group is expanding its design and development team for the two self-owned brands and Kenneth Cole.
Small leather goods had a 41.9 per cent increase in revenue, and the group’s efforts to develop luggage began to pay off with revenue growing by 9.1 per cent.