How Does Xtep International Holdings Company Work?

Xtep International Holdings manages the entire lifecycle of its sportswear products, from initial design and development to final manufacturing. While the company utilizes outsourced suppliers primarily in Mainland China for production, it maintains rigorous quality control through dedicated internal teams. Materials for production are collectively sourced to optimize manufacturing processes and ensure product quality.

The company's competitive edge is built on a multi-brand portfolio catering to diverse consumer needs. This includes the core Xtep brand for the mass market, Saucony for sophisticated customers, and Merrell for trail running and outdoor activities. This strategy allows Xtep to effectively serve different market tiers and enhance brand synergy.

Xtep operates an extensive distribution network with over 8,100 retail stores across Mainland China and overseas. E-commerce has become a significant growth driver, accounting for over 30% of the core Xtep brand's total revenue in 2024, demonstrating robust growth of approximately 20%. This highlights the impact of e-commerce on Xtep International Holdings' business model.

Beyond product sales, Xtep fosters a strong running ecosystem. The company provides professional running services to over 2.1 million Xtep Runners Club members through 67 dedicated Xtep Running Clubs, enhancing customer engagement and brand loyalty. This focus on community building is a key aspect of Mission, Vision & Core Values of Xtep International Holdings.

In 2019, Xtep adopted a multi-brand strategy, acquiring K-Swiss and Palladium, and forming a joint venture for Saucony and Merrell in China. This move aimed to capture the mass market, athleisure, and professional sports segments.

By November 2024, Xtep divested K-Swiss and Palladium to concentrate on its core Xtep brand, Saucony, and Merrell. This realignment prioritizes running and enhances direct-to-consumer (DTC) initiatives.

Despite a volatile economic environment in 2024, Xtep demonstrated resilience, achieving a 6.5% revenue increase. This performance underscores the effectiveness of its strategic adjustments.

The company's e-commerce business saw over 20% growth in the first half of 2024, contributing over 30% to the core Xtep brand's revenue. Xtep also leads in China's running ecosystem, sponsoring over 1,000 events since 2008.

Xtep International Holdings is a leading multi-brand sportswear company in China, boasting over 8,100 stores globally as of December 31, 2024. The core Xtep brand has a substantial footprint with 6,382 adult and 1,584 kids stores in China and overseas.

The company has solidified its position as a prominent running brand in China, catering to both elite athletes and the mass market. This is supported by extensive marathon sponsorships and a well-developed running community, showcasing its dedication to the sport.

Like many in the retail sector, Xtep faces risks such as shifting consumer tastes and intense market competition. Its reliance on outsourced manufacturing, with 69% of footwear and 89% of apparel outsourced in 2023, necessitates strong supply chain management to mitigate potential disruptions.

Xtep aims for sustained profitability by prioritizing its core Xtep brand's running segment and enhancing direct-to-consumer (DTC) efforts. The company anticipates stable demand growth in 2025, fueled by running's increasing popularity and supportive government consumption initiatives.