HONG KONG (Reuters) — China’s top shoemaker and retailer Belle International Holdings Ltd saw its annual profit rise 8 percent but noted sluggish growth in the world’s second largest economy hitting an already weak retail segment.

The slowing economy, fierce competition both in stores and in e-commerce, and rising labour costs are all weighing on retailers in China, with some locked in price wars that are taking their toll on profit margins.

In its filing, China’s biggest footwear retailer by market value said net profit rose to 4.76 billion yuan ($767 million)for the 12 months ending in February, up from 4.4 billion yuan the same period a year ago. It was against an average forecast of 4.54 billion yuan for the period.

Belle, which distributes sportswear for companies such as Nike, Adidas, PUMA and Converse, saw revenue rising nearly 9 percent to 40 billion yuan, up from 36.7 billion yuan in the same period in the previous year.

“In the near future the pace of new store openings will be relatively slow for the sportswear and apparel business, reflecting a cautious outlook in the channels and the prevailing environment,” chief executive officer Sheng Baijiao said in a filing to the Hong Kong bourse.

The company reported 5.16 billion yuan profit for the 14 months ended in February 2014 with revenue at 43 billion yuan.

Nike and Adidas account for about 87 percent of the sales of Belle’s sportswear and apparel business. The sportswear business accounted for about 42 percent of total revenue.

In March, Belle posted a 4.2 percent decline in same-store sales of its footwear business for the fiscal fourth quarter ended in February, while same-store sales for its sportswear and apparel business grew 10.9 percent.

The total number of directly managed retail outlets in mainland China was 20,557 at end-February 2015, including 14,128 footwear outlets and 6,429 sportswear and apparel outlets.

It managed 19,177 footwear and sportswear outlets at end February 2014.

Shares of Belle are up nearly 17 percent so far this year, versus a 18 percent rise in benchmark Hang Seng Index.

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