* Same-store sales growth in footwear business just 2.8 pct
* Belle shares fall more than 4 pct to six-week low
* Footwear and apparel companies fall across the board
HONG KONG, Oct 15 Shares of Chinese footwear and
apparel companies fell on Monday after disappointing quarterly
sales growth at the country's top footwear retailer, Belle
International Holdings Ltd, reignited fears about a
Scores of retailers have struggled in recent months as
China's soaring economic growth slows, leaving inventories
bloated and leading some analysts to wind back earnings
estimates due to a downturn in demand.
Belle, which distributes Nike and Adidas
footwear through some 16,500 stores in China, said late on
Friday its footwear business posted third-quarter same-store
sales growth of 2.8 percent, while sportswear grew 3.6 percent.
That compared with second-quarter growth of 10.5 percent in
footwear and 5 percent in sportswear, and was below company
guidance for mid-to-high single digit same-store sales growth.
"The growth was lower than the management guidance and that
reaffirmed relatively weak consumer sentiment," said Patrick
Yiu, a director at CASH Asset Management.
"We don't expect to see a V-shape rebound," he added,
pointing to ongoing consumer caution.
The weak sales growth comes just a month after Nike said
orders in China for the next several months had fallen for the
first time in three years.
Shares of Belle, which has a market value of about $15.3
billion, fell more than 4 percent to a six-week low, lagging a
0.1 percent drop in the benchmark Hang Seng index.
Smaller footwear rival Daphne International Holdings Ltd
said at the weekend its third-quarter same-store sales
grew a weaker-than-expected 5 percent, down from 14 percent in
the previous quarter. Its shares eased 0.1 percent.
Sportswear brands were also hit with shares of ANTA Sports
Products Ltd down 1.8 percent, China Dongxiang (Group)
Co Ltd off 3.4 percent, and Xtep International
Holdings Ltd down nearly 5 percent.
"The weaker-than-expected 3Q and Golden Week sales prompt us
to revise down our estimates and PO (price objective) for most
discretionary names under our coverage," Bank of America Merrill
Lynch wrote in a research note, referring to third quarter and
recent holiday sales.
Shares of luxury retailers also came under pressure, with
jewellery retailer Chow Tai Fook Jewellery Group Ltd
falling 2.5 percent. Luxury watch distributor Hengdeli Holdings
Ltd lost 1.8 percent, and Italian fashion house Prada
SpA was down nearly 1 percent.
While Belle's margins were expected to come under further
pressure, Citi analyst Catherine Lim said in a note its strong
operations meant it was well placed for a recovery.
"Beyond this blip in growth that most retailers will
register in 2012 earnings, we believe Belle is well-positioned
to stage one of the strongest recoveries into 2013 earnings."