Two Chinese retailers have opened Walker Group’s first four franchised shoe stores in the Chinese mainland and the Walker Group name, located in the province of Hebei. Indicating that it has 200 parties interested in becoming franchisees, Walker says it will roll out 50 franchised doors this year and 100 more in the next one.
As of June 30, Walker had 411 sales points in China, Hong Kong and Taiwan under its own name and that of the numerous brands that it markets. Each of its stores sold on average 6,300 pairs of shoes last year. The group predominantly sells women’s casual shoes, offering six of its own brands as well as Borse Mogan, Kenford and Vert Dense. The group also has the license for Acupuncture in greater China and Japan, and a license for Pink Panther in Hong Kong. Acupuncture sales formed 6.9 percent of revenues last year and are projected to rise to more than 10 percent this year as, along with its partner, Itochu, Walker will reintroduce the brand in Japan.
The group already has 344 company-owned shops in China. It plans to serve first-tier and top second-tier cities with self-managed shops, while licensing out in the rest of the country. The group plans to avoid the one-franchisee-one-door concept, preferring instead to award cities or regions to specific parties. Franchisees will pay cash for Walker goods.
The company may open more than the 190 self-managed doors that it had planned to roll out between April 2007 and March 2008 in Hong Kong and China. It opened 61 of them in the first quarter ended last June 30. The group has HK$150-200 million (€13.9-18.5m, or $19.2-25.6m) earmarked for expansion over the next two fiscal years, and almost all of the budget will be spent in China.
The group reported a 30.4 percent increase in turnover to HK$689.4 million (€63.9m-$88.2m) for the 12 months ended last March 31. Net profit went up 54.0 percent to HK$83.0 million (€7.7m-$10.6m), and the net profit margin rose to 12.0 percent from 10.2 percent. Sales in China grew by 36.4 percent last year, accounting for 53.1 percent of the group’s total, but in the first quarter of this year China’s share grew to more than 60 percent of revenues.
Walker ended the year with 350 sales points and average daily sales of 6,300 pairs.
As Belle International, Stella and several other Chinese shoe companies have done successfully over the last few months (see Shoe Intelligence issues #9 and 11+12), Walker Group raised HK$579 million (€53.6m-$74.0m) by listing on the stock exchange of Hong Kong in early June. The retail tranche of Walker’s public offering was a whopping 592 times oversubscribed.