Belle International (OTCPK:BELLY)
has built itself into the largest branded footwear retailer in China
with a vertically integrated model, a half-dozen of the strongest brands
in the country, and over 14% market share (and almost 50% market share
of ladies mid-to-high-end brands). Although Belle has shown itself to be
pretty adept at building brands and running a store-based concept (with
over 19,000 points of sale in China), it has proven far less skilled
with its online offerings and the company has struggled to drive
profitable growth through this channel and is instead facing some real
competition.
Belle acknowledges its deficits in online
marketing/retailing and management is working on the problem. In the
meantime, the company is slowing its new store construction in Tier 2
and Tier 3 cities and using its considerable cash pile to conduct
M&A transactions with an eye toward becoming a more diversified
apparel retailer. I would give Belle a better chance than its peers of
pulling off this transition successfully, but it may be some time before
revenue and EBIT growth returns to a strong double-digit clip.
Continue reading here:
Belle Needs To Polish Its Online Efforts
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