Masatsugu Horie, Bloomberg
Descente Ltd., a Japanese licensee of World Cup uniform supplier Umbro, plans to open its first own-brand store in Hong Kong as part of an expansion in China.
The company will open the first outlet in Hong Kong to sell its Descente brand next year and as many as two more by the end of 2011, President Etsuro Nakanishi said in an interview yesterday at the company’s Osaka headquarters. The initial store will offer a gauge of demand, he said.
Descente’s domestic sales fell 4.5 percent in the year to March from 12 months earlier, while those in Asia rose 15 percent. The company plans to take on Nike Inc. of the U.S. and Adidas AG of Germany in China, where the government forecast retail sales will rise 16 percent this year.
“The biggest motive for us is the extent to which we can develop the brand,” Nakanishi said. “We need to bring something new to the country to penetrate the market.”
Descente wants to promote its own brand to help it expand sales of wear such as baseball clothes and ski suits across Asia, Nakanishi said. Munsingwear golf clothing, Arena swimwear and gear by Nike unit Umbro, which supplies England’s World Cup uniforms, are among the products the company is licensed to sell.
Descente shares rose 1.3 percent to close at 542 today in Tokyo.
The company in March said it will increase the number of stores in China, including those offering brands it is licensed to sell, to 592 from 386, as part of a three-year management plan from April.
Descente plans to increase sales in Asia to 24.8 billion yen ($268 million) by March 2013, from 17.3 billion yen in its most recent fiscal year.
Japan’s economic growth is stagnant and the country’s declining population means Descente needs to expand abroad, Nakanishi said. The company also plans to open outlets in Singapore and Taiwan through rights agreements.
Descente’s sales fell to 76 billion yen in the year ended in March, from 77 billion yen in the previous year and 81.3 billion a year earlier.
--With translation by Go Onomitsu in Tokyo. Editors: Aaron Sheldrick, Dave McCombs