Business Intelligence on Retailing, Franchising, and Consumerism in China

Global Footwear Company Coming To China

Skechers is expanding its sales and distribution in China through a joint venture with Luen Thai Enterprises, a conglomerate based in Hong Kong with investments in various industries in Asia, North America and the Pacific Region.

Over the next three years, Skechers China expects to open more than 1200 points-of-sale for the brand across China. In addition to Skechers footwear, Skechers China will design and market a collection of Skechers-branded men's and women's fashionable active and leisure wear. The apparel, which is expected to reach market in 2009, will be designed as an extension of the footwear and should further grow the brand in China.

"China's share of the global footwear market is estimated at close to $9 billion for 2008 with this number increasing due to the growing middle class," stated Willie Tan, CEO of Luen Thai Enterprises and Skechers China. "Skechers is a famous global brand and there is a huge market segment in China waiting to be satisfied by Skechers' trendy lifestyle footwear products. We expect to reach $10 to $15 million of sales by year-end 2008."

Luen Thai Enterprises is a privately held company and employs more than 2,000 people. It is part of close to a US$1 billion group of companies that also includes footwear manufacturing, logistics, hotel, travel and tour operations, among others. Most of the businesses have been operating for more than 20 years. Luen Thai Enterprises is steadily bolstering its foundation in Mainland China. Its strong business network in the local retail industry and long heritage of doing business in the country is expected to complement Skechers China's growth plans.

The first shipments of Skechers product under the direction of Skechers China is planned for the Chinese New Year, February 2008.

Skechers and Luen Thai Enterprises are both making a substantial investment in Skechers China to expand and maximize the growth of the brand. The joint venture will grow Skechers' existing flagship store base from three to 10 locations in Shanghai, Beijing, Shenzen and Guangzhou by the end of 2009. The companies also plan to expand distribution to another 250 points-of-sale in the next two years, and more than double Skechers' dedicated stores in 2009.

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