About the Company
Link to this company – http://www.cohl.hk
Of all the companies to be given I get one that has to do with Fashion. As I’m not the best person to say what goes on in the fashion industry I know that in some parts of this assessment it will be a challenge.
My company is China Outfitter Holdings Limited. The company is an investment holding company which designs, manufactures, markets, and sells apparels and accessories in the People’s Republic of China. Its main focus is on menswear. However, it also is involved in the sales of software and the development, operation and management of properties for its subsidiaries – Doright Group Limited, CEC Menswear, Faith Enterprise Limited and SKY Trend Hong Kong Investment Limited.
China Outfitters Holdings Limited conducts business primarily in Hong Kong and the PRC with most of our transactions denominated and settled in Hong Kong dollars (“HK$”) and RMB. To minimise foreign-exchange risks, the Group has a hedging policy in place.
This company was founded on in 2000. However it became an Incorporated company on 7 March 2011. As an incorporated company with limited liability under the Companies Law, Cap. 22 (Law 3 of 1961, as consolidated and revised) of the Cayman Islands, its registered office is located in Grand Cayman. It went public on 9 December 2011.
Its principal place of business is in Hong Kong and China Outfitters Holdings Ltd offices are located in Hong Kong and China. The company as at 30 June 2017 employed 2,629 people.
The ownership breakdown of the company consists of the following:
- General Public
- Venture Capital Firms (VC)
- Private Equity Firms (PE)
- Individual Insiders
- Private Companies
COMPANY LOGO
China Outfitter Holdings has a unique industry where their product focuses on men’s wear. The company operates a number of internationally renowned brands where their product is offered to a wide range of men’s casual to middle/high income customers. The company also offers womenswear. Its licensed brands include Barbour, Jeep, Santa Barbara Polo & Racquet Club (SBPRC), Maxim’s, Sideout, and Koyo Jeans.
Management Team
- Directors
- Executive
- Mr Lo Peter (Chairman and Executive Director)
- Mr ZHANG Youngli (CEO and Executive Director)
- Mr SUN David Lee (Executive Director)
- Ms HUANG Xiaoyun (CFO and Executive Director)
- Non-Executive
- Mr WANG Wei (Non-Executive Director)
- Independent Non-executive
- Mr KWONG Wilson Wai Sun (Independent Executive Director)
- Mr CUI Yi (Independent Executive Director)
- Mr YEAUNG Chi Wai (Independent Executive Director)
- Executive
- Senior Management
- Mr LU Li (Chief Branding Officer and Regional Sales Controller
- Mr YAN Zhong (Regional Sales Controller)
- Mr LIU Wenbo (Chief Procurement Officer – Accessories)
- Ms LEUGN Shuk Li (Chief Design Officer)
Company Milestones
- 2018 – Acquired MCS Apparel Hong Kong Ltd
- 2018 – the Group acquired a 100% interest of Focus Asia Investment Holdings Limited
- 2016 – obtained license of “Greg Norman” brand https://thegolfwire.com/325210-2/
- 2015 – Marina Yachting (private equity of Emerisque) announces joint venture with China Outfitters Holdings Ltd via the Luxembourg company – Spring, owner of the rights to the label
- 2014 – obtained license of “Barbour” brand and acquired the intellectual property rights of “LINCS” brand and “Henry Cotton’s” brand through formation of joint ventures
- 2014 – Announced the formation of joint with MCS Group (a part of the Emerisque Group) – Leading American West-inspired Italian Designed premium Men’s casualwear lifestyle brand.
- 2013 – start off our e-commerce strategy and acquired the intellectual property rights of “MCS” brand through formation of a joint venture
- 2012 – obtained license of Maxim’s brand and acquired the intellectual property rights of “Artful Dodger” brand and “Zoo York” brand in Greater China region
- 2012 – Perry Ellis International Inc. formed a joint venture to introduce the Manhattan brand in China, Hong Kong and Macau.
- 2011 – listed on the Main Board of the HKEx reached revenue of RMB1 billion and retail network totalled over 1,000 retail points
- 2011 – Global private equity firm KKR & Co L.P. (KKR.N) invests $60 million as a cornerstone investor in the Hong Kong initial public offering of China Outfitters Holdings Ltd
- 2009 – acquired the intellectual property rights of “London Fog” brand for Greater China region
- 2008 – became an authorised retailer of “Koyo Jeans” brand
- 2006 – developed first self-owned brand “Doright” brand
- 2003 – obtained license of “Sideout” brand
- 2002 – obtained license of “Jeep” brand and became a multi-brand apparel company
- 2000 – obtained license of “SBPRC” brand
Subsidiary Companies
The company has within its portfolio subsidiary Investment Holding companies. These companies either have a Direct or Indirect link to a percentage of equity attributable to China Outfitters Holdings Limited
Companies with Direct Link are:
- Doright Group Limited – Registered Share Capital UD$1 100% Direct
- Zoo York (China) Limited – Registered Share Capital HK$10,000 88% Direct
- Lincs (China) Limited – Registered Share Capital HK$13,750,000 84% Direct
Companies with Indirect link are:
- CEC Menswear Limited – Reigistered Share Capital HK$100 100% Indirect
- Faith Enterprises Limited – Registered Share Capital HK$100 100% Indirect
- Sky Trend Hong Kong Investment Limited – Registered Share Capital HK$10,000 100% Indirect
RETAIL NETWORK
- Sales Network (as at 30 June 2017)
- 620 self-operated retail points
- 413 third-party operated retail points
- Self-operated Retail Points
- Major cities considered to be core markets:
- Located in cities (Beijing, Shanghai, Chengdu, Tianjin, Shenzhen, Guangzhou, Nanjing, Qingdao, Wuhan, Jinan, Taiyuan, Changsha, Wuxi)
- Concession counter – 604 self-operator counters
- Located within major departments stores such as Wagnfujing, Bailin, Parkson, INZONE, Dayang, Golden Eagle, Van’s, Maoye, INTIME, New World.
- Also from popular shopping malls catering for mid-to-high income consumers
- Standalone stores – 16 self-operator storesLocated in shopping malls with high levels of customer flow
- Major cities considered to be core markets:
- Third-party operated retail Points
- Purchase products from manufacturer before selling to retail customers according to the company’s standardized nationwide pricing guidelines
- Located in cities – Xian, Harbin, Urumqi, Xining, Hefei, Xiamen, Kunming, Guiyang, Chongqing, Zhengzhou, Dalian, Hohhot and Shenyang
- Purchase products from manufacturer before selling to retail customers according to the company’s standardized nationwide pricing guidelines
CURRENCY
The official name for the Chinese currency is Renminbi which means People’s currency and uses the abbreviation RMB. However in the international system the most widespread use is yuan (CNY) So it can be written as CNY 1,000 or RMB 1,000. The Chinese yuan or RMB is only used in Mainland China whereas Hong Kon uses the Hong Kong Dollar. https://www.thechinaguide.com/blog/chinese-currency
PRODUCT DESIGN
The company also has obtained the right to use London fog, Zuyue, Artful Dodger brand in China as a joint venture. This venture will allow the partners to operate the Manhattan and MCS brands also in China. The company will also provide their own brand of Men’s Clothing called Derui. They are also the authorized retailer of Koyo Jeans branded clothing in China. A report that was commissioned by Euromonitor has shown that JEEP and SBPRC brands are the leading brands in China’s mid-to-high-end casual men’s wear in terms of total retail sales.
SUPPLY CHAIN & MANUFACTURING
China Outfitters Limited Company launch a series of new men’s styles every six months and introduce them to third-party retailers through the order fair. The third-party retailer will place an order through the ordering meeting, and we will determine the production plan based on the order and the internal sales forecast of the self-operated retail store.
The company will set the Spring/Summer collections to June or July before each season, and the Autumn/Winter collections will be held in December or January before each season. From receiving orders to shipping products to retail stores, they have a longer production planning period, so they can outsource production to third-party manufacturers to reduce production during off-peak production hours (where prices are generally lower). cost.
Interesting to note the following
China Outfitters Holdings Limited prefer manufacturers that pass quality control certifications such as ISO 9001-2000. The company will conduct a sample inspection of the products and require the raw materials and products to be certified by the quality control inspection agency designated by the relevant government authorities in China.
SALES NETWORK
China Outfitters Holdings have the belief that with a broad and well managed sales network it will help to be able to establish a unified image of each brand and allow good penetration in the market of the Group. As of December 31, 2018, the company’s sales network included 576 self-operated retail points and 290 retail points operated by third-party retailers.
The following map shows the geographical distribution of our self-operated retail outlets and third-party retail outlets in China on 30 June 2017:
https://www.marketscreener.com/CHINA-OUTFITTERS-HOLDINGS-9590362/calendar/
https://www.marketwatch.com/investing/stock/1146?countrycode=hk
https://www.morningstar.com/stocks/xhkg/01146/quote
NEWS ARTICLES
https://www.chinafinanceadvisor.com/2012/01/
https://mergr.com/kkr-acquires-china-outfitters-holdings
CHINA OUTFITTERS HOLDINGS PTY LTD
Latest Share Prices
https://www.reuters.com/companies/1146.HK
Latest Key Metrics
https://uk.reuters.com/companies/1146.HK/key-metrics
Latest News
Ch Outfitters (01146) sees 40% decrease in interim net
[ET Net News Agency, 1 August 2019] China Outfitters Holdings Limited (01146) said it is expected that group’s unaudited profit attributable to equity holders of the parent for the six months ended 30 June 2019 will decrease significantly by at least 40% as compared with that for the six months ended 30 June 2018 of RMB57.18 million. The decrease is attributable to (i) the continuous slowdown in growth of macro-economy and weak retail market sentiment, together with the impact of e-commerce on conventional retailers, led to a decrease in number of retail points, revenue and gross profit of the group; (ii) a decrease in government subsidies and tax refund received; and (iii) an increase of amortisation of equity-settled share option expense. (RC)
ACCT13017 - Financial Statement Analysis 
My company is also based in China. It’s difficult to wrap my head around a state asset owned company, especially one that seems so successful. I also have a limited fashion sense but I know who Greg Norman is, so I am assuming it’s some sort of golf attire collection? It’s my understanding that China is the leading country in textiles, this is sure to give them an edge on international competition.
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Thank you for your feedback, Sharon. If you hop over to my Step 3 of the assignment 1 Tab you will see a video of what apparel China Outfitters are up to within their business. The company has its hands in many top brands.
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Hi Iris
Great read. You have written a thorough overview of your company! 🙂 Don’t worry, I have no clue how the fashion industry works either.
I find the company logo interesting (warning, weird analysis coming). The Chinese is written in the blue font, while the English is written in the orange font. The blue and orange semi-circle shapes are also arranged in the same way as the yin yang symbol. I interpret this as the coming together of Western and Chinese culture.
Your paragraph that starts with ‘China Outfitter Holdings has a unique industry…’ repeats at the end of the paragraph.
I love your layout for this blog post, in particular how you display the management team and company milestones.
In the introduction, you state the company was founded in 2000, but was established in 2011. The company milestones show China Outfitter Holdings was acquiring licences and developing in-house brands. Does this mean they weren’t retailing the brands during the 11-year period? It feels a little odd that the company would have enough capital to acquire all of these different licences, set up different retail outlets and such without operating and earning income. AirAsia was founded in 1993, but began operations in 1996. So I wonder if that is the same situation.
Disregarding the above confusion, I believe I have worked it out. The 2011 milestone states that the company was listed on the Main Board of the Hong Kong Exchange, which would suggest it was private for the 11 years and went public in 2011. So, this would suggest they were operating during that period, just now they can raise more capital through the exchange. If you have a different understanding or evidence to the contrary, please let me know. 🙂
I found it really interesting to learn about the supply chain and manufacturing process. Also, I have completed a quality management unit and am familiar with the ISO9001 system, so I appreciate that little tidbit of information. It is quite a rigorous and thorough quality system.
I look forward to reading your analysis of the financials and restatement. 🙂
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Hi Iris,
Thank you for the opportunity to learn more about the company that you were allocated for this unit, China Outfitter Holdings Limited. I feel that your company shares similarities to that of the company that I was allocated in the previous unit ACCT11081, specifically geographically. I understand that this company may be outside of your comfort zone, but I feel like being allocated a company that falls outside your comfort zone will lead to further research and ultimately a better comprehensive understanding of various aspects of the company.
I really enjoyed the format that you utilised for presenting information on your company, but breaking it into sub-headings and dot points it was much easier to learn important milestones and aspects of China Outfitter’s. I did also notice that the geographical spread of retailers spans the majority of China which requires you to consider the economic industry trends of a whole country whereas my company only operates throughout New South Wales!
I look forward to learning more about your entity, particularly the financial statements and your subsequent analysis of the trends and ratios.
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Iris, the first thing I did was open your annual reports to find out if your company (as a Chinese company like mine) was also incorporated in the Cayman Islands – and yes it is! This is good news for me as it settles some of my KCQ’s regarding the Cayman Islands and the tax haven concept. I completed some further research on why Chinese companies incorporate in the Caymans.
These articles are pretty intense with information may help you to understand too if you need to get your head around it like I had to!
http://www.chinainvestin.com/index.php/en/china-offshore/news/1293/china-offshore-the-cayman-islands-still-atop-the-incorporation-destinations-list-for-chinese-companies
https://www.lexology.com/library/detail.aspx?g=cd220a3b-a1ff-4f09-9331-da56f9f9dbdd
http://www.mondaq.com/caymanislands/x/573138/offshore+financial+centres/How+China+Supercharged+The+Offshore+Market+In+Cayman+And+BVI
From how I understand it and have explored in my own analysis of my company is that it is a necessity for publicly traded Chinese companies to incorporate in offshore locations such as the Cayman Islands. This is because Chinese laws exclude non-Chinese investors from owning a direct stake in Chinese entities.
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Hi, Nicole, I have done a feedback sheet for you for your blog. See moodle
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Howdy just wanted to give you a quick heads up. The text in your post seem to be running off the screen in Opera. I’m not sure if this is a format issue or something to do with internet browser compatibility but I figured I’d post to let you know. The design and style look great though! Hope you get the problem fixed soon. Cheers
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Hi,Iris
I just read your article and feel enjoyed it. You provide plenty of information about your firm in excellent format. The pictures and video attached give a really convenient access for me to learn your firm and obtain informationd about it.
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