High Inventory Of Sporting Goods, Fierce Competition And Shrinking Profits.

Mainland China

The stock is too high. Since the second quarter of this year, orders for major sporting goods companies have slowed down. Following PEAK's orders to adjust orders, Anta has also made adjustments. This year, orders for the fourth quarter of the year will see a low double digit decline. The order volume of this year's total volume has dropped, the first year-round decline since the launch.

Anta said that since the order began in the first half of this year, competition in the mainland sporting goods industry has been fierce, resulting in pressure on the company's profit. Discount is being made to reduce potential stock risks in retail channels, so as to reduce orders that have not yet been shipped.

In addition, the company also reported that the same store sales in the first quarter of this year recorded a decline in the number of low units.

As for another sporting goods firm XTEP, the number of orders in the fourth quarter of this year was increased.

The company said retail sales were down to about 5 months from the past 5 to 6 months, and 1 to April this year.

The major sporting goods providers believe that in the first half of this year, the mainland's macro-economic and market conditions are grim, and the retail price cutting operations caused by hoarding of stocks have led to intensified competition in the industry.

Anta chairman Ding Shizhong has publicly stated that in the next six to 1 years, the industry is full of challenges. We hope that the order can be flat this year and believe that the situation will improve in the second half of the year.

Analysts pointed out that normally the third and fourth seasons will be accounted for in the first half of this year, and the number of sales in the same store is increasing. It is expected that the performance of sports goods stocks will slow sharply in the first half of this year.

In recent years, Anta and Lining have been competing for the position of sporting goods in mainland China. Both of them have continuously expanded their stores in the mainland. But after the Beijing Olympics, there was an overstock of sports market in the mainland.

In the third quarter of 2011, Lining ordered the first decline in the order volume. At that time, Anta said that it had not been affected by the attack on the two or three tier city market until the first quarter of this year, the growth rate of orders began to slow down, and the third quarter recorded a decline in the number of high units.

Last year, the backlog of sporting goods in the mainland was backlog. In order to reduce the pressure of distributors, Anta, XTEP and PEAK cut orders this year. PEAK has adjusted the third quarter and fourth quarter orders, and the order volume has decreased by 20% to 30%.