History
Pou Chen Corporation (“Pou Chen”) was founded in September 1969 with canvas and rubber footwear as major products initially. Thereafter, Pou Chen focused on athletic and casual footwear manufacturing, and has also expanded into brand licensee business and sportswear retail business in recent years. Currently, Pou Chen has transformed itself to be an industrial holding company, its two core businesses, footwear and retail, are mainly operated by its subsidiaries and affiliates (collectively, the “Group”).
Core Business
Footwear business
In the late 1970s, Pou Chen began to produce athletic footwear on an original equipment manufacturer (OEM) basis for the branded company, “adidas”. With the professional R&D ability and experienced factory management, Pou Chen, from a simply OEM, successfully turned to be an original design manufacture (ODM) for major international brand name companies such as Nike, adidas, Reebok, Asics, New Balance, Puma, Converse, Merrell, Salomon, and Timberland. Based on the risk diversification and cost saving consideration, Pou Chen via its major subsidiary, Yue Yuen Industrial (Holdings) Ltd. (“Yue Yuen”,http://www.yueyuen.com), expanded production bases to China, Indonesia, Vietnam, United States and Mexico from 1980s. In 2002, Pou Chen sold its interests in 67 companies engaged in footwear material manufacturing to Yue Yuen as part of the Group’s strategy to vertically integrate its footwear business within Yue Yuen. Nowadays, the Group is the largest branded athletic and casual footwear manufacturer in the world, and it could produce over 300 million pairs of shoes per year. The Group accounts for approximately 20% of the combined wholesale value of the global branded athletic and casual footwear market.
Retail business
The Group began with brand licensee business in 1992 for distributing Converse products in China and later expanded into sportswear retail business. After years of exploration and expansion, the Group already established its extensive retail network in the Greater China region. To foster operational focus and enhance the whole valuation of the Group, the retail business and brand licensee business were spun off and separated listing under Yue Yuen’s subsidiary Pou Sheng International (Holdings) Ltd. (“Pou Sheng”, http://www.pousheng.com/) in June 2008.
In addition, for reducing the sole manufacturing risk, the Group diversified into electronics business by investing in Global Brands Manufacture Ltd. in 1999, which is engaged in manufacturing printed circuit boards (PCB) and PCB assembling (PCBA). However, the erupted global financial crisis in 2008 caused the Group to review and to readjust its business strategy. The Group then continuously integrated the resources of its subsidiaries and affiliates to sharpen the competitive edge of its core business. Accordingly, the Group disposed its 40% stake in GBM by auction in March 2010. Concurrently, the Group will pay more attention to its footwear business and retail business to raise the value of the Group.
Looking Ahead
For footwear business, the Group will continue to expand its production facilities in its three existing bases, China, Vietnam and Indonesia. The Group will also keep on cooperating with its branded companies to provide full-line products and value-added services. For retail business, the Group would like to further develop the brand name of “YYSports” by providing high standard customer service, promotions and advertisements. Looking ahead, the Group will focus on its core businesses, footwear and retail, to deepen the strategic partnerships with its global branded companies in order to yield a better operation performance.
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