PEAK Announcements Of Business Operations, But Orders Are Down.

On Friday (May 4th), Jinjiang sports shoes enterprises listed in Hongkong

(01968, HK) announced the recent announcement of China's business operation.

The announcement said PEAK sports was held in the fourth quarter of 2012 at the ordering meeting of the group.

(at wholesale prices) decreased by 20% to 30% over the same period last year.

At the same time, PEAK's stock has increased, its inventory in 2011 increased from 335 million yuan at the end of 2010 to 421 million yuan, an increase of about 25.67%.

In fact, PEAK's dilemma is not a case.

Comprehensive media coverage, 361 degrees, Anta and so on.

Also been exposed to serious inventory problems.

The 2008 Beijing Olympic Games brought unlimited business opportunities to these enterprises. However, in the low demand post Olympic era and the four foreign market crises, Fujian sports shoes enterprises encountered unprecedented challenges.

PEAK orders decline

The order meeting data has always been a barometer of the performance of domestic sports brands.

According to the above order data provided by PEAK, the amount of PEAK orders declined, covering its footwear and clothing products.

Among them, footwear products fell by 20% to 30%, and clothing products also fell by 20% to 30%.

For the specific decline, PEAK rated the decline of footwear products as high, that is, close to 30%, while clothing was rated to be in the middle position from 20% to 30%.

The average wholesale price of PEAK footwear and clothing products was flat compared with last year when the order amount declined.

On the other hand, the number of stores in PEAK is also shrinking considerably.

Data show that as of March 31st this year, PEAK sports retail outlets in the first quarter of the same store sales were flat compared with the same period last year.

But the number of stores decreased by 283 to 7523 at the end of last year.

PEAK sports predicts that by the end of this year, the number of PEAK sports stores will be reduced to 7000, and all the stores will be franchised stores.

By this calculation, the number of stores in PEAK from the end of last year to the end of this year will be reduced by about 10%.

"It's a last resort."

For the contraction of PEAK's stores, Hu Baogang, a member of the China Fashion Association's market expert committee, commented.

He believes that the homogenization of Jinjiang footwear industry is serious, including PEAK, Jordan, 361 degrees, Anta and so on. There is no essential difference. In such a mode of competition, enterprises will face pressure from all sides.

When several enterprises are listed, everyone expands their stores. The market is equivalent to the "zero sum game" of "loss of one party's revenue necessarily means loss of the other party".

Is industry integration inevitable?

It is understood that in 2011, China's shoe enterprises were speeding up. In order to achieve the goal of marketing and shop opening, there were still many shoe enterprises to breed their brands, which eventually led to an increasing inventory and overall sales volume was not satisfactory.

PEAK's 2011 Annual report shows that last year's annual sales volume was 4 billion 647 million yuan, up 9.4% from 4 billion 250 million yuan a year earlier.

But net profit last year was 778 million yuan, down 5.4% from 822 million yuan in the same period last year.

Data showed that PEAK's stock in the first half of last year increased from 335 million yuan at the end of 2010 to 421 million yuan, an increase of about 25.67%, with an average turnover of 49 days, compared with 38 days in 2010.

In the first quarter of this year, the number of authorized retail outlets decreased compared with last year, and PEAK plans to further shrink its stores.

"On the surface is the store is decreasing, in fact, the industry may be faced with a comprehensive adjustment and integration."

Hu Baogang believes that the future is not just for sports shoes, but also for Jinjiang, including Guangdong and Zhejiang.

And in the future trend, it is impossible for the same brand to do the same thing. For example, there are 10 enterprises in Jinjiang. There may be 5 or 6 left in the future, and the specific areas will be further broken down.

"In fact, it has reached a pole, and it will not shrink."

He added.

However, there are reports that PEAK sports is still expanding its production capacity blindly when the market is low. The footwear production base of Shanggao County, Jiangxi Province, will be put into operation by the end of this year. The garment production base in Huian County of Fujian province will also be put into operation by the end of next year.

By then, the annual output of PEAK footwear products will increase to about 16 million 500 thousand pairs, and the annual output of clothing products will increase to about 19 million 100 thousand.