Xtep projects 20% jump in sales due to strong consumer demand

Chinese sportswear manufacturer Xtep International Holdings (1368.HK) expects sales to growth by about 20% this year as it expands its retail network into smaller cities, Bloomberg reported. The projection, made by Xtep CFO Terry Ho, is similar to that given yesterday by Anta Sports (2020.HK). Both companies are riding on the same trend: an increase in Chinese consumer demand for casual shoes and clothing. Xtep’s profit rose 27% to US$94.8 million in 2009 while sales rose 24% to US$519 million. The company, an equipment supplier to English Premier League football club Birmingham City, may open as many as 1,000 new stores in 2010, taking its total to about 7,000, Ho said. The company may also spend as much as 12% of this year’s sales revenue on branding.