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The Hong Kong-based publisher said Tuesday that profits rose 7 percent in its financial year ending March 31 compared to a year earlier, despite revenue declining 10 percent on pandemic headwinds.
The company pointed to a strong rebound in its media business in the second half of its fiscal year, and forecast strong growth boosted by an increased demand from brands for digital marketing services.
A blow to advertising, particularly among fashion advertisers that previously made up Hypebeast’s biggest clients, as the pandemic hit in the first half of the year caused a necessary pivot in the business, broadening its client base to include more companies from the technology, gaming, automobile, F&B and entertainment sectors, founder and CEO Kevin Ma explained.
“That really helped us become a stronger company on the advertising front,” he said. “That’s a big area of growth.”
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Another area that’s ready to be scaled up is e-commerce, Ma added. Though Hypebeast started its e-commerce operation in 2012, a slowdown in its business gave the company some space to tweak internal margin issues, leaving its post-pandemic e-commerce operation in “very healthy” shape.
Specifically in China, which has long been a major market for Hypebeast, the company has seen “steady growth” over the past year. Hypebeast China business development director, Crystal Choi said they were currently hiring in order to cope with demand for agency and advertising clients that are seeing a greater share of global budgets directed at the China market, hoping to capture demand among Chinese consumers who are unable to travel elsewhere to shop.
“China is really coming back, there is a lot of demand,” she said.
Looking ahead, major milestones for the rest of 2021 are likely to include the opening of a major new physical retail store in New York, though its actual opening date depends entirely on the unpredictable timeline of permit approvals throughout the construction process, Ma joked.
The seven-storey space will include not only a retail space, but also company offices, studio and a second outlet of its Hypebeans cafe, the first iteration opened almost two years ago in Hong Kong alongside Hypebeast’s first physical storefront, HBX.
“We don’t want to do too many [stores],” Ma said. “That’s not the goal. You also have to activate them, create energy, do events and make them exciting, so we have ideas to do more, but for now it will just be Hong Kong and New York.”
