Chinese Sports Brands Suffer A Lot After Brutal Growth

At the time of economic downturn, another industry that has been dragged into the mire is China's sports brand industry. Recently, Li Ning When the company issued an early warning of loss in advance for the whole year, Jin Zhenjun, the executive vice chairman of the company, said that Li Ning had closed 1200 stores in the first half of the year in order to save costs. Industry insiders said that sports brands need a clear positioning, clear brand positioning, show the uniqueness of the brand, and enhance their differentiated competitiveness if they want to go out of the "cold winter".

　　 Operation in trouble

On July 4, the licensor of the domestic sports brand Li Ning Group in Spain declared bankruptcy due to the deterioration of the market environment and its poor operation; On August 22, the semi annual report data released by Li Ning Company showed that its operating revenue in the first half of the year decreased by 9.5% year-on-year, at least 3.88 billion yuan, and its net profit decreased by 85% to only 44 million yuan; On September 12, Li Ning's branch in Tsim Sha Tsui, Hong Kong, was closed. At the same time, when Li Ning issued an early warning of loss in advance for the whole year, Jin Zhenjun, the executive vice chairman of the company, said to the public that Li Ning had closed 1200 stores in the first half of the year in order to save costs.

Li Ning is not the only one whose orders have decreased and whose profits have suffered a serious loss. The life of several major sports brand enterprises in China is not easy.

Anta's semi annual report also shows that profits have been seriously affected due to high inventory and substantial discounts on products. According to the financial report, the inventory of the special step is 671 million yuan, and the 361 degree inventory is 451 million yuan.

According to Ma Gang, an independent commentator quoted by the media, in Sichuan, the most obvious one is the store under China Trends. He said that official data could not be obtained yet, but according to what he learned, some stores of China Trends in the region should be closed. Many places can still see their stores before, but now there are no more.

Bad news keeps coming, Senma, Peak, etc clothing According to the brand semi annual report, since this year, with the substantial increase in inventory, the primary challenge for development is to adjust stores. In addition, according to media reports, Li Ning closed stores, while Anta opened stores in secondary and more secondary business districts, but neither method had obvious effect.

Zhu Qinghua, a researcher in light industry of CIC Consulting, thought in an interview with the reporter of China National Economy News that, first of all, the high inventory has affected the sales revenue and operating profit of all major brands this year; Secondly, the increase in rent and labor costs has greatly squeezed the company's profit space; Finally, the competition among sports brands is fierce, and all sports brands are offering discounts and promotions market The demand is limited, and the sales volume cannot be increased significantly, which leads to the overall profit not rising but falling. Sports brands should take active measures to face the current difficulties.

Hidden danger of blind expansion

In recent years, the purchasing power of sports brand products in China has declined due to serious homogenization, blind expansion and economic weakness. As a result, the inventory problem of different brands is highlighted.

Zhu Qinghua told the reporter that the annual turnover of the top ten sports brands in China is basically about 23 billion yuan. It takes about half a year to digest the inventory of domestic sports brands. Once the inventory situation has improved, the sports brand will usher in a new development situation.

According to a data from Dongxing Securities, the number of newly added stores of domestic sports brand enterprises listed in a centralized way from 2007 to 2009 totaled nearly 20000, and the number at the end of 2009 was twice that at the end of 2006.

In fact, in 2010, the expansion of the stores of China's sporting goods enterprises ran like a wild horse. One data shows that the top three or four enterprises have almost simultaneously broken through 7000. From this point of view, the speed of "seizing territory" aggravates the internal conflict of channels and brings hidden dangers for high inventory.

So, how can enterprises redeem themselves? Zhu Qinghua suggested that the positioning should be clear and the brand positioning should be clear, which can show the uniqueness of the brand, enhance its differentiated competitiveness, help consumers to understand the products in depth, and is a powerful tool for enterprises to win; In addition, establish a good brand image, which can enhance brand awareness and influence, and effectively improve the performance level; Finally, we should improve the management system and strictly control the cost of enterprises. The reduction of cost can ease the financial pressure of enterprises.