Seize the day for life-chang­ing move

China Daily (Canada) - - HONG KONG - By SO­PHIE HE in Hong Kong so­phiehe@chi­nadai­lyhk.com

Luen Thai Hold­ings Ltd CEO Henry Tan sees tremen­dous op­por­tu­ni­ties in the Chi­nese con­sumer mar­ket as well as e-commerce.

Tan said that the fam­i­ly­owned Luen Thai En­ter­prises, as dis­tinct from the Hong Kong-listed hold­ing com­pany, and Amer­i­can footwear gi­ant Skech­ers USA formed a joint ven­ture com­pany called Skech­ers China Ltd in 2008 to sell footwear on the Chi­nese main­land and South­east Asia.

The busi­ness is grow­ing very fast, Tan said.

Luen Thai holds nearly 50 per­cent of the joint ven­ture on the Chi­nese main­land, un­der a coun­try-spe­cific stake-shar­ing setup.

“Right now we have maybe 1,600 stores on the Chi­nese main­land, and we ex­pect our stores to grow at a rate of 20 per­cent a year,” said Tan, adding that sales of Skech­ers China are grow­ing at a dou­ble-digit pace.

Skech­ers China footwear is priced on the Chi­nese main­land at 500 yuan ($77.18) to 600 yuan a pair, ac­cord­ing to Tan.

Cur­rently most of the firm’s Skech­ers stores on the Chi­nese main­land are in first- and sec­ond-tier cities, but Tan said he in­tends to bring the prod­ucts to thir­dand fourth-tier cities as well.

E-commerce is also an im­por­tant part of Luen Thai’s growth, and Tan

ex­pand­ing quickly in the bag man­u­fac­tur­ing busi­ness. Staff num­bers in the Philip­pines will prob­a­bly be in­creased from 4,000 or 5,000 to above 10,000 in the next 12 to 18 months. Rapid ex­pan­sion plans are also un­der­way for Cam­bo­dia, making com­puter bags and back packs, while lux­ury bags will con­tinue to be man­u­fac­tured in the Philip­pines.

For the six months ended June 30, Luen Thai Hold­ings’ profit at­trib­ut­able to own­ers of the com­pany hit $7.36 be­lieves this busi­ness still has a lot of po­ten­tial. “E-commerce on the Chi­nese main­land and over­seas is gain­ing in pop­u­lar­ity. I think that it will be chang­ing the dy­nam­ics of the re­tail busi­ness all over the world, it will be af­fect­ing man­u­fac­tur­ing: How we sell and what we sell in the years to come.”

Tan said re­tail busi­ness on the Chi­nese main­land is grow­ing very well. Al­though the Chi­nese econ­omy has slowed down, it is still grow­ing, and the mid­dle class is ex­pand­ing, which is the mar­ket seg­ment that the com­pany mainly tar­gets.

Tan be­lieves that the na­tion is en­ter­ing into a new econ­omy with all the changes in the In­ter­net, and so he chal­lenges his ex­ec­u­tives

mil­lion, a plunge of 55.2 per­cent com­pared to the same pe­riod a year ago.

The slide was at­trib­uted to the un­sat­is­fac­tory per­for­mance of the firm’s ca­sual and fash­ion ap­parel di­vi­sion, ac­cord­ing to a state­ment filed with the Hong Kong Stock Ex­change. It said the poor show­ing from ac­quired com­pany Ocean Sky Group, due to re­vamp­ing of fac­tory op­er­a­tion and re­de­ploy­ment of staff in Cam­bo­dia, hurt the gross mar­gin and there­fore the net profit un­der the to an­a­lyze how the group’s busi­ness has been pos­i­tively or neg­a­tively im­pacted by the new econ­omy and e-commerce.

“E-commerce is chang­ing ev­ery­body’s life, and it is cre­at­ing trans­parency over in­for­ma­tion. If you are able to come up with good ideas, I think it will cre­ate a lot of space for young peo­ple to think out­side of the box and maybe start a busi­ness on their own.”

“This is what I be­lieve. In your life, there are a lot of op­por­tu­ni­ties in front of you, whether you are able to seize the op­por­tu­nity when it passes by you is very im­por­tant, and it will change your life if you can cap­ture one or of two th­ese op­por­tu­ni­ties.”

ca­sual and fash­ion ap­parel di­vi­sion. Also, or­ders placed by a ma­jor Ja­panese cus­tomer in the first half of 2015 were slashed be­yond orig­i­nal expectations, thus af­fect­ing the di­vi­sion’s bot­tom line.

Profit mar­gin for the pe­riod also de­clined from 2.9 per­cent a year ago to 1.4 per­cent. Rev­enue was $522 mil­lion, a fall of ap­prox­i­mately 7 per­cent from the same pe­riod last year.

Con­tact the writer at so­phiehe@chi­nadai­lyhk.com

PARKER ZHENG / CHINA DAILY

In­tegrity, trust­wor­thi­ness, ded­i­ca­tion and dili­gence have stood Henry Tan in good stead through his more than four decades of serv­ing Luen Thai, and he tries to in­still the same val­ues among ex­ec­u­tives and gen­eral staff alike.

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