Taipei, May 5 (CNA) Les Enphants Co., Ltd., a Taiwan-based children's garment and accessory supplier, said Saturday that it is planning to expand its operations in China by about 200 outletsby the end of this year.
With an increase in the number of its stores on the mainland,Les Enphants is expecting its purchase bargaining power to improveaccordingly, which will boost the profitability of its China operations.
As of the end of the first quarter, the company had a total of1,846 outlets in China, serving as the distributor of several international children's garment brands such as Disney Baby, New Balance Kids, Barbie and Peter Rabbit.
With China imposing new taxes on foreign investors at the beginning of 2011 and labor costs there on the rise, Les Enphants said it has been suffering from higher operating costs and has witnessed its bottom line being squeezed.
Last year, the company posted NT$1.38 in earnings per share (EPS), down from NT$1.73 recorded in 2010. In the first quarter of this year, its EPS stood at NT$0.44, compared with NT$0.51 recorded in the same period of last year.
While its bottom line in China has been impacted by rising operatingcosts, the company is still continuing its expansion plan there but aims to improve the efficiency of its mainland stores to strengthen profitability.
In addition to China, Les Enphants has overseas presence in Thailand, Singapore and Indonesia.
In Taiwan, the firm is looking toward a recovery in the local birthrate to boost buying interest in children's garments and relatedgoods this year, as the Year of the Dragon traditionally seesa higher-then-usual birthrate.
In the first quarter, the number of newborns rose about 17 percent from a year earlier to about 52,079. The government expects the number to exceed 210,000 for the whole year.
Les Enphants said sales generated from its Taiwan operations for the first quarter rose nearly 10 percent on the back of the rising number of new births and added that it expects similar sales growthfor April.
It also said it has devoted itself to promoting another brand name -- i-Baby Mall -- in Taiwan, which operates large stores targeting both children and mothers, to broaden the customer base.
(By Maranda Hsu and Frances Huang)