Sunbridge grows company-owned store network to 63
Acquires 39 additional stores & outlets – up from 24 previously
Significant geographic store expansion into new cities in Mainland China
Total investment of $3.45 million
On track to achieve target of 70 self-owned stores & outlets by end of calendar 2014
Increase in self-owned retail outlets will improve brand visibility and margins
Sunbridge well placed with strong balance sheet and cash on hand of over $35 million Melbourne & Jinjiang, 01 December 2014: Sunbridge Group Ltd (ASX: SBB) (Sunbridge, the Company) is pleased to confirm that it has increased the number of self-owned stores and outlets in China from 24 to 63. This number is in line with the Company’s stated goal of boosting the number of self-owned stores and outlets to 70 by the end of calendar 2014. As well as acquiring new retail stores, a large number of Sunbridge’s latest outlets are stand-alone retail displays strategically located within major department stores across China.
This strategy has been executed to leverage off the exposure gained by having a presence in these department stores, and also to deliver the best return on the investment of capital through delivering higher sales revenue.
Sunbridge has made a total investment of circa $3.45 million to secure these additional 39 stores and department store displays, which is less than the $4 million budgeted. The investment is likely to increase this quarter as the company acquires additional standalone stores and displays from franchise owners and department stores.
Sunbridge now has additional stores and displays in Shanghai, Chongqing, Jiangsu, Anhui, Sichuan, Henan, Jiangxi and Guangdong. Sunbridge had a strong cash balance of $35 million as at 30 September 2014, which has been driven by steady sales from the company’s two brands, and .This strong cash balance gives the company the increased financial flexibility to repay some short term debt facilities, continue to acquire franchise-owned stores and outlets, and construct new standalone retail stores. Sunbridge also continues its focus on managing overheads and lowering its cost base to maintain and strengthen margins.
Sunbridge’s Managing Director Xu Jia Yin commented:
“We continue to focus on increasing our companyowned store and sales network. Having 63 stores and outlets under direct ownership is not enough. We intend to grow this number further, firstly achieving our target of 70 store by the end of this calendar year, then planning for our next round of acquisitions.”
“We are taking a measured and strategic approach to this program, and in the first instance, acquiring lower cost department store outlets so we preserve our strong cash position. Through this strategy, we intend to further enhance Sunbridge’s profile as a leading distributor and retailer of men’s fashion in the growing Chinese market.”
“With a strong balance sheet and over $35 million cash on hand, we now have the flexibility to pursue growth in a bold manner to further build on the success we have had with our brands in China so we can deliver maximum value for our shareholders.” Sunbridge expects to update shareholders on other growth initiatives in the coming weeks.
