2022 was a remarkable yet challenging year for the Viva Group. The Group’s international apparel and footwear business was impacted by the pandemic, and the development plans for various brands also faced enormous challenges. Notwithstanding this difficult situation, the Group was able to seize the opportunities of investments and acquisitions, and successfully completed the acquisitions of some brands with long history and huge development potentials, thereby laying an important ground for the future expansion of the international multi-brand apparel and footwear segment. During the year, the Viva Group finished its acquisition of Amedeo Testoni, a century-old Italian luxury leatherwear brand in January. Later in July, the Group also completed its acquisition of Clarks, a well-known footwear brand with nearly two hundred years of history. After a successful expansion to the overseas markets, which are mainly in Europe and the United States, the Group’s revenue jumped to around HK$6.9 billion, and marked a significant milestone in its history.

EXPANDING THE APPAREL AND FOOTWEAR BUSINESS SEGMENT WITH HIGH-QUALITY BRANDS AND PRODUCT CATEGORIES

In 2022, Viva Group continued to focus on the tremendous demand of the prime consumer group, and targeted markets beyond China, Hong Kong and South East Asia, which are more on the economies in Europe and the United States. In particular, the Group has made an analysis on the geographical differences in the consumer demands in different markets for high-quality lifestyle and fashion, in order to formulate more targeted brand strategies, to increase operating efficiencies, and to build our multi-brand, multi-category international apparel and footwear business.

Among Viva China’s brands, Clarks was perceived as a strong brand in the overseas markets, such as Europe and the United States. Its market share is ranked No. 1 in the UK fashion and casual footwear industry, and top 10 in the United States, where it has its loyal consumer groups and is able to generate stable income. Because the pandemic was more under control in Europe and the United States during the year, coupled with a rebound in consumer sentiment, the consolidated revenue of Clarks contributed significantly to the Group’s financial statements. Its profits also helped to offset the losses of the other apparel and footwear brands within the Group during their transition period. In respect of brand development for Clarks, we strive to increase the brand value and continue its brand story backed with the legacy accumulated for centuries. The Group will continue to improve its market performance in Europe and the United States, and enhance product style and characteristics while strengthening the sales of the core products categories. In early 2023, the Group also completed the transaction to increase its interest in Clarks and further achieved an effective shareholding of 51%.

Following the completion of the acquisition of Amedeo Testoni in early 2022, the Group has actively adjusted its marketing strategy, with an aim to restore the brand’s positioning as a high-end luxury brand. Through this acquisition, the Group has added a high-end luxury brand to its portfolio and expanded existing business scale by extending the geographical footprint of its multi-brand apparel and footwear business to Europe, Japan and South Korea. In addition to this, the Group plans to open an Amedeo Testoni flagship shop in Milan in the first half of 2023 to further promote its Italian brand legacy. The Group will also open full-price stores of Amedeo Testoni in regions of higher profits, including the Greater China, Japan and South Korea, in order to enhance the profit margins and the brand image as a high-end luxury brand.

Another brand under the Group, bossini.X, is at the stage of continuous investment for product repositioning. This newly launched brand, bossini.X, will continue to expand in commercial districts with more traffic located in the first- and second-tier cities in China during the year. In July 2022, the Group has also opened the first bossini.X flagship shop in Harbour City, which is at a premier fashion district in Hong Kong. At the same time, the Group will also continue to invest in the affordable luxury brand LNG, which is a self-developed brand of the Group, to further expand its distribution channels in high-end business districts in the first-tier cities in China by opening more boutique stores.

In the future, we will continue to explore other markets and adjust product positioning, build up the mainstream consumer groups loyalty, thus create more business growth points apart from Clarks for the Group. A diversified apparel and footwear business has created enormous potentials and brought more possibilities to the Group’s business. Through the unique interpretation and inheritance of its brands, the Group strives to bring consumers a higher quality consumption experience.

PROSPECTS

Looking ahead, although the macro business environment remains uncertain, the world economy will recover from the pandemic. The key consumer groups of Clarks mainly come from Europe and the United States. We believed that through the optimization of product mix and distribution channels, coupled with the strength of the brand itself, we can further increase our market shares in Europe and the US. We will also closely monitor the opportunities arising in the Asia-Pacific market. The Group will operate its overseas business with a steady and progressive approach, and also closely explore and grasp any consumption opportunities emerging after the relaxation of the pandemic prevention and control measures in China, so as to gain overall business improvement.

In January 2023, China has entered into a new stage towards the pandemic prevention and control, with production and people’s living orders gradually restored, consumption power is expected to be released, and the domestic market is also gradually recovering. Notwithstanding, with the less stringent pandemic prevention and control from the end of the year, the total retail sales of consumable goods in December increased accordingly. Furthermore, the China government issued the “Strategic Planning Outline for Expansion of Domestic Demand (2022-2035)”, which might help to boost the domestic demand. We will reasonably adjust the retail channels, and grasp the opportunities to expand into the domestic market.

Viva Group is committed to become a top-tier international consumable goods brand operating company. We will continue to pay close attention to brands with potentials in the market, and actively expand the scale of the apparel and footwear business in order to pursue a long-term sustainable development. The Group also strives to achieve brand repositioning and increase its penetration in the prime consumer market, in the ways of maintaining a leading position in product creativity and keeping up with the latest fashion trends. At the same time, the Group will also expand the vertically integrated industry chain by building its own supply chain platform and e-commerce platform, to provide e-commerce service and live stream product promotions for its brands, so as to increase the brand awareness and also to enhance the synergies both internally and externally.