Local Sports Brand: Olympic Year Into High Storage Dilemma

The annual reports of several sports Brand Company show that the whole local sporting goods industry collectively fell into a high storage dilemma, and the cost of raw materials, human resources, warehousing and other costs rose. The profit space was challenged, the order growth rate declined, and the growth of performance was further slowed down.

To be sure, every Olympic Games is not only a feast for sports fans, but also a part of it.

Our performance boosters.

Adidas, the German sportswear and equipment manufacturer, has recently raised its annual performance target in the hope of stimulating sales in London and European Football Championships. Its net profit is expected to increase by 12%~17% in 2012.

However, the situation of domestic brands does not seem to be so optimistic.

In contrast to the enthusiasm of the 2008 Olympic Games in Beijing, this year's "Olympic spring" seems rather cold.

The annual reports of several sports Brand Company show that the whole local sporting goods industry collectively fell into a high storage dilemma, and the cost of raw materials, human resources, warehousing and other costs rose. The profit space was challenged, the order growth rate declined, and the growth of performance was further slowed down.

"Even if it is a rare opportunity for London Olympic Games, it will be difficult for the domestic sports brands to break through the current adjustment cycle."

Liu Peijun, an analyst at Shang Pu light industry, told reporters.

Negative growth is the main theme.

In 2008, Lining lit the Beijing Olympic torch with a natural space step.

The most brilliant year.

In 2009, Lining's sales volume reached 8 billion 387 million yuan, once becoming the second largest sports brand in the domestic market.

But at the moment, Lining has a lot of trouble.

Li Ning Co annual report shows that in 2011, a number of financial indicators such as company income, gross profit and net profit were negative compared to 2010.

Data show that Lining's inventory provision in 2011 was 188 million yuan, an increase of 63.48% over the same period in 2010. Due to the new wholesale discount rate and the rising cost of production, gross margin continued to decline.

On the other hand, Lining still needs to maintain its huge brand image expenses, and its distribution costs and administrative expenses increased by 3% from last year to 3 billion 223 million yuan.

Zhao Xiao, an analyst with China Merchants Securities, believes that Lining is facing the pressure of slowing growth in the industry and slowing sales.

Due to the slow growth of sports population in sports, more than half of the products in the market are sports life products, which reduces barriers to entry and improves competition in the industry.

At the same time, the cost increase exceeded expectations.

Labor costs may continue to rise at an annual compound growth rate of 10%~15% in the next 3~5 years.

The same shadow shrouded in almost all local sports brands.

Ma Gang, a marketing expert in shoe clothing, told reporters that most of the advantages and sources of profits of local brands are concentrated in two or three line cities, such as XTEP, and about 80% of the retail stores are located in two to four cities.

Although the channel has brought huge profits to these brands, it can not solve the fundamental problem.

In his view, as long as the number of stores has been growing, brand dealers will eventually face the problems of store rentals, labor costs and material costs.

London Olympic Games break through hard business opportunities

The era of big profits with time difference and scale has gone forever.

Facing the rising cost and the pressure of competition, it may be the fundamental solution to the local brand that has already encountered the international brand "attack". First, the cost must be cut down.

Public information shows that Anta,

Last year, the number of stores increased by 229 and 582 respectively, much lower than in previous years.

In addition, the industry revealed that excluding the new stores in the second half of last year, Anta stores in China last year closed nearly 100 stores.

PEAK has also publicly stated that this year will continue to implement the strategy of "opening large stores and closing small stores to further enhance the average sales area of retail outlets".

Ding Shuibo, President of XTEP (China) Limited, said in an interview that the two or three line should continue, but the number of new stores this year is much lower than that of last year. "Our focus will be on renovation of 800 shops.

The sixth generation terminal image store will be more fashionable this year, and we expect it will bring an increase of 20% to 30% for the same store value. "

It remains to be seen whether it can solve the plight before closing.

In 2012, the local sports industry group encountered a downward turning point, which seemed to be a difficult fact to change.

State Securities

Zhang Bin, an industry analyst, said that for the local sports brand, the 2008 Olympic Games is a watershed.

Although the London Olympic Games is a rare opportunity, it is very difficult for local sports brands to take the opportunity to "rally".

Zhang Bin said, "first, the development of local sports brands can not be separated from the prosperity of the macro-economy. Secondly, the relocation of consumer brand cognition has great influence on the brand.

In addition, product homogeneity is too strong and marketing means is always a big constraint. "

People in the industry generally believe that local sports brands need at least 3~5 years to carry out structural adjustment.

"Closing stores and lowering inventories seem easy. Actually, they are all very traumatic and take a long time.

So the 2012 Olympic Games will still be hard for local sports brands to turn over. Maybe next Olympics.

Zhang Bin said.