The long-term recovery of the local sporting goods industry

"In-depth adjustment" of the local sports brands, these days have announced the 2013 semi-annual report.

As of August 23, a number of companies such as Li Ning, China Dongxiang, 361 Degrees, Anta, Peak, Xtep, etc. all disclosed their performance reports for the first half of 2013. According to the company's mid-year report, the sportswear industry is still in the destocking phase in the first half of the year. However, most of these companies expect that the downturn in the industry will continue in the second half of the year and will be improved by the end of this year at the earliest.

On the one hand, it is the industry's continued weak expectations, and on the other hand, it is the pain of enterprise transformation. Experts believe that the "winter" of the local sporting goods industry is still not over and the market is picking up "the long road ahead."

The negative revenue growth “off store tide” and “destocking” are still the key words of the industry “go ahead with weight” and become synonymous with the Chinese sports brand in the first half of this year.

On August 6, Anta announced its interim results: As of the end of June this year, net profit fell by 18.7% to 626 million yuan. Li Ning's report shows that the net loss in the first half of the year was 184 million yuan, compared with 44.29 million yuan in the same period last year. On August 13, Peak's interim results announced that net profit decreased by 62.5% to 89.9 million yuan.

At the same time, "off store tide" and "destocking" are still industry key words. In the first half of this year, Li Ning, Anta, Peak, Xtep, and 361 degrees had a net decrease of 1,271 stores in several companies. In the first half of the year, the total number of Kappa brand stores in China was also reduced from 3,119 at the end of last year to 2,550, a decrease of 569, a decrease of 18.2%, and it is the listed company with the largest number of closed stores.

Inventory has not improved. The semi-annual report shows that as of June 30 this year, Li Ning’s inventory was 841 million yuan, a decrease of 79 million yuan from the end of last year; Anta inventory was 576 million yuan, a decrease of 110 million yuan from the end of last year; Peak’s inventory was 340 million yuan, compared with At the end of the year, it decreased by 46 million yuan.

The impact of the business model on consumer personalized and differentiated demands shows a clear trend of change. The higher requirements for products, the “test”, are not ideal, and most brands blame the “clean-up inventory and other activities continued in the first half of the year”. However, judging from the means of clean-up, most of them are “similar”: including measures to reduce orders, close stores, clear aging stocks, and improve retail channels.

The reporter learned from official information of Li Ning that in the first half of this year, over 90% of Li Ning Group's distributor partners participated in the channel renewal plan. The Group will continue to solve the problems caused by the early over-expansion by optimizing the sales network. In the future, the Group will continue to optimize the sales network, make its structure and scale more healthy, and comply with the new business model after the transformation.

Anta board director Ding Shizhong stated to the media that on the one hand, through the control of order quantity, on the other hand, e-commerce channels, factory stores, and discount stores were used to assist in cleaning off season stocks. In Peak's performance warning, Peak said that apart from cleaning up inventory, the weak economic conditions have had a negative effect on the Group's demand for new products. Since May, Peak Director Xu Jingnan has continuously increased his stake in the secondary market. Among them, from May 6th to May 15th, the total holdings of 7.85 million shares, after the increase in holdings Xu Jingnan and his family held shares from the proportion of issued shares increased from 65.76% to 66.13%.

Xiong Xiaokun, a light industry researcher with China Investment Advisors, pointed out to reporters that the poor performance of the sports brand semi-annual report was due to the macroeconomic downturn and slow or even declining demand. In addition, consumer demand for personalization and differentiation has shown a clear trend of change. Higher requirements have been placed on products, and the pressure on existing product inventory is relatively high. “The economic downturn and the declining trend in consumer demand for products are aggravating for companies. In addition, online e-commerce and other channels have caused a lot of impact on the brand's original sales channels and business models.”

The key issue of the slow recovery of the industry is still the industry-wide weakness. Perhaps by 2014, it will be difficult for the industry to achieve growth. “In the second half of the year, the industry is picking up slowly. The situation of various brands is not the same.” Ma Gang, a sports brand industry professional, interviewed by reporters Said. Under the influence of the closing tide of stores and the decline of same-store sales, coupled with the ever-changing economic environment, fewer and fewer people are willing to spend money. The Peak CEO had previously told the media that he was not optimistic about the performance of the sports brand in the second half of the year and considered it “still difficult to recover” in the second half of this year.

The reporter noticed that although some brands disclosed in the semi-annual report, the market has initially recovered and the second half is expected to see a turnaround. However, analysts believe that the current channel reforms of several giants are in a period of pain. Ma Gang believes that the key issue is the weakness of the entire industry. Perhaps by 2014, it will be difficult for the industry to achieve growth.

In fact, in the Chinese market, not only local brands have encountered cold winters. Taking the American brand Nike as an example, its performance in the Greater China region has been a drag on the global market. In the 2013 financial year that ended on June 30, Nike Greater China's revenue dropped 5% year-on-year, which is the only one of Nike’s six sales regions. No growth area.

In the research report, China Merchants Securities analyst pointed out that due to the capacity expansion faster than the demand, those who have not yet listed the small and medium-sized sports brands, in the absence of funds, lack of brand awareness under the premise of the future will certainly be slowly out of the market.

Ma Gang said that next, on the one hand, companies should shrink the channels that had been expanded too quickly in the past, and on the other hand, they must grasp the weak consumer attitudes to make targeted marketing. It is understood that in response to the crisis, some brands have begun to transition. For example, 361 Degrees and Anta all lay out children's clothing brands. Among them, 361 degrees children's clothing income has accounted for 10.4% of the company's total revenue. The total number of 361 degree children's clothing retail stores increased from 1590 to 1678. However, children's wear in the first half of the year decreased by 37.8% year-on-year. “In addition, local brands need to be improved in the future in the areas of ambiguous brand positioning, serious product homogeneity, and low brand recognition,” said Ma Gang.