Revenue down, profit up for Kappa licensee China Dongxiang

While half-year revenue was down, profit rose for Kappa brand licensee China Dongxiang Group. The international sportswear company’s revenue for the six months to the end of June fell 3.7 per cent to RMB626 million (US$93.8 million) while profit attributable to equity holders rose 11.9 per cent to RMB536 million.

Gross profit margin was up 1.1 points to 58.3 per cent.

During the half, the group says it continued to adopt online and offline brand-marketing strategies.

Meanwhile, Kappa co-operated with artists from various genres such as entertainment, music and arts in a pop-culture/sportswear collaboration embodying its brand philosophy. It initiated a tripartite co-operation with A.Four Labs by designer Kazuki Kuraishi and independent experimental music label Posh Isolation in Copenhagen to launch a cross-border collection.

Kappa Kids continued with its active marketing campaign, including pop-up events with BTV Juvenile Dance Group in Beijing Chongwenmen and Beijing New Yansha Mall. Kappa Kids also sponsored TV program Super Surprise on Shandong Cable TV to boost brand awareness.

At the end of June, the group had 1639 Kappa stores (including 328 Kappa Kids outlets).

During the first half, the group rejigged its business in Japan. It changed most of the management team, as well as evolving its approach from simply selling to brand management.

Meanwhile, the group started introducing the Japanese ski brand Phenix into China to capitalise on its hosting of the 2022 Winter Olympics. It is partnering with ski centres to open specialty stores at ski grounds.

E-commerce development remained steady, says the group. In an online exclusive, it launched a Kappa x Pac-Man range in co-operation with the video game company. E-commerce sales for the six months surged by 25 per cent (e-commerce sales of childrenswear excluded).

China Dongxiang owns all rights to the Kappa brand in China, Macau and Japan.