Colder weather perks up win­ter sales

China Daily - - HOLIDAY | BIZ LIFE - By WANG ZHUOQIONG wangzhuo­qiong@ chi­nadaily.com.cn

This win­ter’s colder weather and strong snow have con­trib­uted to the strong Chi­nese sales of UGG boots, boost­ing its par­ent com­pany’s fi­nan­cial re­sults.

Ac­cord­ing to fi­nan­cial re­sults for the third fis­cal quar­ter ended Dec 31, 2017, of Deck­ers Brands, which de­signs, mar­kets and dis­trib­utes footwear, ap­parel and ac­ces­sories, net sales in­creased to $810.5 mil­lion, up 6.6 per­cent from the $760.3 mil­lion for the same pe­riod last year.

Op­er­at­ing in­come was $193.2 mil­lion com­pared to $53.3 mil­lion for the same pe­riod last year.

UGG brand net sales for the third quar­ter in­creased 4.3 per­cent to $734.7 mil­lion com­pared to $704 mil­lion for the same pe­riod last year.

“We saw suc­cess in China due to in­creases in brand aware­ness and grow­ing con­sumer de­mand fol­low­ing our first hol­i­day sea­son with our brand in­flu­encer, youth icon An­ge­lababy Yang,” a Chi­nese celebrity model and ac­tress, said Dave Pow­ers, pres­i­dent and chief ex­ec­u­tive of­fi­cer.

Rev­enue in China in­creased 10 per­cent from Oc­to­ber to De­cem­ber, and the com­pany’s over­all per­for­mance and growth are very pos­i­tive, ac­cord­ing to Olivier Lo­rans, Deck­ers China’s vice-pres­i­dent and gen­eral man­ager.

But Lo­rans does not con­sider cold weather as the key rea­son for the growth. He pri­mar­ily cred­its the com­pany’s sto­ry­telling abil­i­ties — par­tic­u­larly its store dis­plays and its ef­forts to com­mu­ni­cate with younger con­sumers. Its new Pom­pom col­lec­tion launched in Septem­ber, which sold out quickly.

“We be­lieve that the in­crease in sales is nat­u­ral and we are ex­pect­ing higher growth in the fu­ture,” he said.

The China unit, which op­er­ates 150 out­lets, opened its first con­cept store on Sept 23 at a sig­na­ture shop­ping cen­ter in Bei­jing; the unit plans to open 45 more con­cept stores in the fu­ture. That kind of am­bi­tious strat­egy stems from fast growth — 15 per­cent last year — in the coun­try.

“We ex­pect (growth) to reach 20 per­cent this year,” Lo­rans said of 2018.

Lo­rans plans to grow UGG into a four-sea­son life­style brand through mea­sures in­clud­ing re­ju­ve­nat­ing the men’s cat­e­gory and fast-track­ing the chil­dren’s range — par­tic­u­larly its mini-me col­lec­tion — as well as lever­ag­ing the fan base on so­cial me­dia. The com­pany is look­ing for a male celebrity as well to cre­ate some buzz in the men’s cat­e­gory.

For Deck­ers, the United States re­mains its No 1 mar­ket and China ac­counts for 10 per­cent of its global sales rev­enue.

“I’m ex­pect­ing it to in­crease to 25 per­cent in the near fu­ture,” Lo­rans said.

Pow­ers said last year that the group has made ef­forts in pre­serv­ing the UGG Clas­sic’s fran­chise with a fo­cus on core brand po­si­tion­ing, reach­ing a younger con­sumer with ex­ist­ing and new dis­tri­bu­tion, grow­ing the men’s busi­ness with an im­proved and fo­cused prod­uct line, and cre­at­ing com­pelling and seg­mented year-round of­fer­ings.

“The third quar­ter is an in­di­ca­tion that those ef­forts are pay­ing off as we suc­cess­fully ex­e­cuted on de­liv­er­ing sea­sonal, rel­e­vant prod­uct from UGG with stand­out items, such as in­no­va­tive win­ter and wa­ter­proof boots, slip­pers, the Clas­sic Mini and the new men’s styles,” he said.

Pow­ers said their “re­fined prod­uct strate­gies, en­hanced con­sumer mes­sag­ing and whole­sale ac­count op­ti­miza­tion ef­forts re­sulted in much stronger full price sell­ing for its brand port­fo­lio dur­ing the key hol­i­day sea­son.

“While more fa­vor­able weather also con­trib­uted to our year-over-year im­prove­ment, hard work by the en­tire or­ga­ni­za­tion en­abled us to cap­i­tal­ize on ad­di­tional up­side op­por­tu­ni­ties,” the CEO said.

Deck­ers now ex­pects fis­cal year 2018 re­sults to pro­duce net sales in the range of $1.873 bil­lion to $1.878 bil­lion. The gross mar­gin is ex­pected to be about 49 per­cent.

PRO­VIDED TO CHINA DAILY

UGG China cred­its its sale growth this win­ter to bet­ter com­mu­ni­ca­tions with younger con­sumers, such as invit­ing Chi­nese ac­tress An­ge­lababy to be its brand in­flu­encer.

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