PEAK Group: Take The Initiative To Change "Terminal Zero Inventory"

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In October 10th, PEAK announced the results of the second quarter order conference, which increased by 9.5% compared with the same quarter in 2011. The same store sales in the third quarter increased 6.2% compared with the same period last year.

The growth rate slowed down compared with the first quarter orders.

This led to speculation that the sharp decline in the growth rate meant a decline in the sports industry market.

This conjecture also led to fluctuations in PEAK's share price.

In this regard, PEAK sports (quotes, information, commentary) CEO Xu Zhihua said, PEAK slowdown is not outside speculation, but PEAK to protect dealers to take the initiative to control measures, but also PEAK entered the internal structural adjustment stage of an important move.

"For PEAK, who aspire to become an international company, it is in order to win the future by actively changing and changing the traditional concept of growth in terms of heroes."

Xu Zhihua said.

Terminal zero inventory to protect dealer interests

"PEAK's dealership has never been lost.

Dealers are our friends, partners and interests communities, "Xu Zhihua said." therefore, we will adjust the corresponding policies to protect the interests of dealers in view of the changes in the economic environment and the different stages of development of enterprises.

China and even global economic growth and the impact of high inflation on the market continue to reach the second half of the year, the industry as a whole slows down, but PEAK still adhere to the brand value-added and sound price policy, PEAK believes that this can not only maintain the brand's lasting value, but also avoid falling into the vicious competition misunderstanding.

In order to maintain the sustainable development of enterprises, PEAK adopted the principle of "terminal zero inventory" at the Q2 ordering conference in 2012. The number of orders placed by the distributor and the corresponding production volume were produced by the factory.

In the past industry practice, the order quantity is floating on a certain proportion on the basis of actual demand, that is to say, a part of products may become the inventory burden of dealers.

And this time PEAK completely abandoned this industry practice and reduced dealer pressure to zero.

According to the needs of distributors, production and sales can greatly reduce the inventory and capital backlog, speed up capital turnover, reduce inventory management costs, avoid market changes and product renewal, resulting in price reduction, unmarketable risks and so on.

The pressure of dealers will be reduced, the corresponding capital turnover capacity and development capability will be greatly improved, and this will help improve the whole.

Xu Zhihua said, "everything is for dealers.

At present, influenced by the RMB exchange rate and the tightening policy of monetary policy, the economic environment is not clear, and the market will inevitably generate some fluctuations.

Under such circumstances, we need to protect dealers' safety and smooth through this very special period. Headquarters will also provide more support to those relatively disadvantaged dealers.

Terminal zero inventory is a measure and an attitude that PEAK is willing to share with the distributors.

"Terminal zero inventory" does not mean a reduction in profits. After reconfirmation of the third quarter and the 4 quarter orders, it is expected that annual sales can still achieve double-digit growth. Although some orders have been cancelled, they will not increase inventories or increase costs because they have not been produced. PEAK is confident that gross margin will remain at the level of last year and the first half of this year.

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Adjustment of internal structure and the next peak of development

In the past few years, PEAK has adhered to the "internationalization" core strategy, relying on international resources (quotes, information, comments) to achieve rapid development.

Taking basketball as the core and developing in various fields, PEAK is a global partner of NBA, FIBA (FIBA) and WTA (International Women's Professional Tennis Association). By this way, PEAK has achieved the goal of brand internationalization and is committed to nurturing the domestic market with international resources.

The seven city conference held in Nanchang, Jiangxi, is PEAK's first sponsorship of domestic large-scale events as an international brand.

Frequent harvest of brand value, combined with scientific marketing channels, PEAK has achieved rapid development both at home and abroad.

At present, PEAK has established four R & D centers in Beijing, Guangzhou, Quanzhou and the US Losangeles. The number of authorized retail outlets in China has reached more than 7000. The products have also been sold to more than 70 countries and regions in Europe, Africa, Asia, Oceania and other 5 continents. In the first half of 2011, overseas business revenue has accounted for 10.3% of PEAK's total revenue, and the export proportion is much higher than that of Chinese counterparts.

There are different life cycles in the development of enterprises. In order to adapt to the dynamic changes of the global economic environment, the formulation and implementation of marketing strategies should be optimized and adjusted at the right time.

Xu Zhihua pointed out that after a period of rapid development, PEAK should enter a stable period of development, and comb and locate the past achievements and future trends.

A few days ago, PEAK sports said at the teleconference that as of the end of August, the company had added 470 new stores. Due to slowing sales and optimizing sales network, 700 branches will be opened next year and 500 less efficient branches will be closed.

At the same time, PEAK also released the "big city strategy" with the recent announcement that it will expand the first and second tier cities on the basis of the two or three line cities.

It is understood that PEAK in Guangzhou, Beijing, Shenzhen, Shanghai and other pilot cities, has initially completed the market layout, of which Guangzhou market coverage is more prominent, next year will continue to strengthen efforts to expand in Shanghai.

The above cities are not only the core cities of the mainland economy, but also the commanding heights of public opinion. In these cities, PEAK vigorously hatches the market and builds high-end shops representing the international brand image of PEAK. This is not only a strategic need for its brand internationalization, but also in fact has sounded the horn of protest against ADI and Nike.

In the future, stores, shopping malls and basketball theme shops are still the main retail channels for PEAK. At the same time, PEAK is also trying to form alliances with Tianhong, Mao ye and Wanda new business formats to further diversify the sales network.

In the coming period, with the coming of major events such as the London Olympic Games and the Brazil World Cup, the awareness of mass sports and the individualization of consumer demand will further subdivide the sports product market, and new challenges and opportunities will also come.

Xu Zhihua said that PEAK made an early layout and made early preparations to compete ahead of the competitors for the next high-speed growth period.