Lining Lost The Watermelon To Pick Up A Seed But Did Not Germinate.

Can the future growth path be as happy as Chinese plation?

It is still hard to say at the moment.

Give up

It can only be watched and thrived, swallowed up.

However, the circle has developed a black hole.

Amid the confusion of brand positioning, under the pressure of cost pressures to raise prices, domestic sporting goods companies are losing money due to their authorized brand Lotto.

Another difficult problem has been exposed.

according to

In 2010, the report showed that after 20 years of exclusive franchise of the Italy fashion sports brand Lotto China in 2008, the brand has been running a loss for 3 years, and the cumulative loss as of the end of 2010 was about 200 million yuan.

And the newly released China trend 2010 financial report shows that although its performance is lower than expected, its net profit still exceeds RMB 1 billion 400 million yuan, higher than that of Lining.

Ironically, the 85% of the latter's income comes from Kappa, which was abandoned by Lining.

According to the contract signed 3 years ago, Lining has obtained the exclusive license of Lotto trademark for 20 years, and can develop, manufacture, marketing, publicize, promote, distribute and retail the licensed Lotto products in China.

According to the contract, Lining has to pay an average of 19 million 690 thousand yuan per year since 2008.

"

It is still in the early stage of development and promotion, and has undertaken higher product R & D and brand promotion expenses.

For the performance of Lotto, in 2010, Lining explained that last year, the group continued to expand its channel to expand its Lotto brand.

However, influenced by market environment and competitive factors, business growth is slower than expected.

Financial reports show that

Pre tax profit plus depreciation and amortization amounted to a loss of 91 million 749 thousand yuan.

Looking at the performance in the past 3 years, Lining lost 12 million 400 thousand yuan in the year after winning the Lotto brand in 2008. In 2009, the deficit increased to 76 million 910 thousand yuan, plus 2010.

It has lost 3 years and accumulated a loss of around 200 million yuan.

Today's Lotto is just like an unending carriage for Lining. The loss has not been alleviated and the investment needs to continue.

However, Lining said that the Lotto brand strategy has been adjusted in the middle of last year, emphasizing the retail performance and profitability of the store, reasonably controlling the speed of the channel development and the distribution structure of the shop formats, and choosing the key markets to make breakthroughs.

In the eyes of ordinary consumers, today's Lotto is different from the other one in terms of product style, category, shop decoration and layout.

Run in the same groove.

According to Lining's official position, Lotto belongs to "

", which is very similar to K AppA.

In 2002,

The actual owner B asicN et signed a concession agreement, but 5 years later, Lining gave up.

The latter is caught in the direction of China's trend, and through the fashion positioning, K AppA has become a unique sports brand quickly.

According to the newly released China trend 2010 earnings report, although the overall revenue and earnings are lower than expected, but the annual net profit still reached 1 billion 464 million yuan, higher than last year.

The overall profit is 1 billion 105 million 800 thousand yuan.

It is worth noting that Lining's sales volume last year was 9 billion 478 million 500 thousand yuan, while China's sales revenue was less than half, only 4 billion 260 million yuan, of which K AppA accounted for 85% of China's trend revenue.

The gross profit margin of both sides is immediate.

In the explanation for the purchase of Lotto,

It is impossible to mention K AppA.

But there are too many similarities between the two brands, which reflects Lining's idea of losing a watermelon and picking up a seed.

Public information shows that in 2008, in exchange for Lotto franchise for 20 years, Lining spent 934 million yuan.

In the same year, the sales revenue of China was RMB 3 billion 320 million yuan, the profit was RMB 1 billion 367 million yuan, and the compound growth rate of sales revenue and profit exceeded 96% in successive years.

Powerful

As long as the direction is firm, it is not a problem that Lotto brand wants to get continuous capital and resources support.

But the key is that, after experiencing the high growth period of the domestic market from the Beijing Olympic Games, such as the international giants Nike, Adidas, and Lining himself, they all realized that the pace of market development began to slow down.

China's trend also reveals similar views in its earnings report.

"The mainland sporting goods market has increased by about 30% every year during the period -2007 2004, and even after 2008, the growth rate of the sports industry has dropped to two digits after the 45% increase in the Olympic Games."

At the same time, the rapid rise of local sports brands aggravated competition in the industry.

Among them, leisure sportswear is higher than functional sports wear. "Both local and international sports brands want to enter the leisure sportswear market. At the same time, the international casual wear brand is also actively occupied the mainland market."

and

Similarly, the Lotto, which originated in Italy as Lining's brand positioning in the international high-end market, still needs to revolve in the first-line market. It can't go deeper into the three or four tier market and seek space like other popular sports brands.

If you pay attention to the profitability of a single store, it is difficult to strengthen the brand.

If we insist on increasing investment, we can not avoid the rigid costs such as rent, promotion and so on. When is the loss?