After going private two years ago, Belle International is preparing a public offering for Topsports, a retail subsidiary that is regarded as China's largest network of sporting goods stores. A listing application was made on June 27 to the Hong Kong stock exchange for the IPO, showing that it would be jointly sponsored by Bank of America and Morgan Stanley. No information is yet available on the number of shares or the target price, but Bloomberg says that the IPO could raise as much as $1 billion.

According to Reuters, Topsports is said to be covering about 16 percent of the Chinese sports apparel and footwear market at the retail level with a total of 8,343 stores. It is about 30 percent bigger than its closest competitor, Pou Sheng, which belongs to Yue Yuen Industrial, the world's largest footwear manufacturer.

Most of Topsports' stores are mono-brand stores, including 6,383 for Nike and Adidas, which together represented 87.4 percent of the company's revenues last year. Aside from a few multi-brand sports stores operating under the Topsports, Foss and Sports Cities banners, the balance are single-brand stores for Puma, Converse, The North Face, Timberland and Reebok.

In the financial year ended on Feb. 28, Topsports booked a sales increase of 23 percent to 32.56 billion yuan renmimbi (€4.2bn-$4.7bn), generating a 53 percent higher net profit of RMB 2,199.8 million (€285.1m-$319.7m). Its gross margin went up by 0.2 percentage points to 41.8 percent.

The flotation can be regarded as a smart move on the part of the investors who took Belle International private in view of the fact that the Chinese sports apparel and footwear market continues to grow strongly, judging in particular from the results of all the public companies operating in the sector including Adidas, Nike and local players like Anta Sports, Li Ning and Xtep.

According to research conducted by Frost & Sullivan, the market for sports apparel and footwear has been growing at an average compound annual rate of 12.8 percent since 2014, reaching a level of RMB 235.7 billion (€30.6bn-$34.3bn) last year, and it is expected to reach sales of RMB 392.3 billion (€50.9bn-$57.0bn) by 2023. With bicycles and sports equipment included, it was worth an estimated $59.6 billion in 2018, according to NPD, and thus occupied a secure second place after the U.S.

Founded in 1978, Belle International was taken private in 2017 by a consortium led by its management, Hillhouse Capital, and CDH Investments for $6.8 billion. It was delisted from the Hong Kong stock exchange after the privatization process. Aside from the Topsports business, its portfolio of brands includes Joy & Peace, Staccato, Basto and Mirabell. It distributes the shoes of Bata, CAT, Clarks and Hush Puppies in mainland China, Hong Kong and Macau.

Prior to its privatization, Belle took an impairment charge on its footwear business as its sports division surpassed the non-athletic footwear business for the first time in the financial year ended in February 2017. The group reported a drop of 18.5 percent in net income on 2.2 percent higher sales of RMB 41.7 billion (€5.4bn-$6.1bn) for that year, with non-athletic footwear sales down by 10 percent to RMB 18.9 billion (€2.4bn-$2.7bn), while the sports stores raised their sales by 15.4 percent to RMB 22.7 billion (€2.9bn-$3.3bn).