True Religion signs agreement in China
True Religion recently announced in its third quarter report of fiscal 2011 (ended on September 30) that 57% of its net sales were made via its US stores and e-commerce website. As for its wholesale division, 77% of sales also came from the US market. But this dependence on its domestic market could be decreasing over the next few seasons given that, in the last quarter, the American denim brand opened two stores in England, one in Germany and one in the Netherlands.
Even though it also recently launched 3 boutiques in the US, where another 5 store openings are planned before the end of the year, True Religion has now turned its attention to the Chinese market. In fact, the label just signed a licence agreement with Envols International Co, the distributor for the Giorgio Armani brand in China, for the exclusive distribution of its products in China as well as a non-exclusive distributorship in Hong Kong. The agreement, which ends in 2016, includes distribution via retail stores, shop-in-shops and other premium retail concepts in the region.
True Religion’s turnover for the third quarter of this year reached 108.4 million dollars, of which 23.5 million came from international sales. This shows a growth of over 30% in comparison to the same period last year. Net sales also increased by almost 17%. “The U.S. Consumer Direct segment, which is our most direct link to consumers, increased its sales by 34% and its operating profit by 40%. And, our International operating profit increased 45% over last year, driven by the strategic investments we made in the past year to take more direct control of our business, especially in Germany, Canada and the U.K.," explained True Religion CEO Jeffrey Lubell.
However, the California-based brand saw an 18% decrease in wholesale sales in the US market. Its operating income reached 19,926 million dollars, showing a slight decrease in its operating margin of 18.4%.
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