Inventory Problem Still Puzzles Domestic Sports Brands

Anta sports recently released its first half performance report in 2012. The report shows that in the first half of the year, the turnover of the company was 3 billion 930 million yuan, down 11.6% from 4 billion 450 million last year, and the profit attributable to shareholders decreased by 17% to 769 million 600 thousand yuan, due to overstock and fierce competition in the market.

In addition, the gross profit margin of the company dropped from 42.8% in the same period last year to 41.8%, of which footwear, clothing The gross margins of accessories and accessories were reduced by 0.3, 1.5 and 4.9 percentage points to 42.5%, 41.5% and 35.8%, respectively, and Anta said the overall decline in gross margin was due to the fierce competition in the market, resulting in a decline in average selling prices.

Currently in Hong Kong There are six listed domestic sporting goods companies, namely, Lining, Anta, 361 degree, XTEP, PEAK and trend. In recent years, the growth rate of several companies has declined to varying degrees. In 2011, Lining and the trend showed negative growth. Among them, Lining's annual sales volume of 8 billion 930 million yuan was 2011 yuan, down 5.8% from the same period last year, and its annual sales volume was 2 billion 740 million yuan, down 35.7% from the same period last year. In 2011, the gross profit margin of Lining fell from 46% in 2007 to 46%, while the movement dropped from 59% in 2008 to 47%.

　　 Inventory pressure continues to increase

Due to the impact of NIKE, Adidas and other international sporting goods giants, the domestic sporting goods brand has been overstock in recent years. Anta's inventory pressure is relatively smaller than that of several other sporting goods companies in China. In 2011, Anta's stock days were 25 days, an increase of 3 days compared with 2010, while Lining's stock days increased 15 days to 46 days compared with that of 2010. The number of stocks in the trend increased to 54 days from 22 days in 2010, and 44 days and 33 days respectively in XTEP and PEAK.

Anta semi annual report showed that the average inventory turnover days increased from 36 days to 50 days in the first half of the year, and the average receivable turnover days increased from 14 days in the same period last year to 35 days.

In 2011, the average accounts receivable of Anta sports accounted for 9% of sales, up two percentage points compared with the same period last year, and was relatively low among the similar companies in China. Data show that in 2011, the proportion of accounts receivable accounted for 24% of annual sales in Lining, 21% in PEAK, and 20% in XTEP.

But Anta still said inventory management is the top priority of the company, and actively guided the order budget of the order to reduce the risk of inventory crisis in retail channels.

In the subsequent announcement of the first quarter 2013 order performance and the same store sales growth in the first half of 2012, Anta pointed out that the competition in the domestic sporting goods industry continued to be fierce. In 2013, orders began to adopt a new wholesale discount rate policy. Therefore, the order volume of the first quarter of 2013 in the company recorded a decrease of 20%-30%.

In the case of declining sales, Anta increased its control over costs. In the first half of 2012, Anta's advertising and publicity expenses accounted for 10.4% of its turnover, down 2.2 percentage points from the same period last year. In 2011, the ratio of advertising and publicity expenses to turnover was 13.7%, an increase of 0.1 percentage points.

At the same time, Anta began to control the opening speed, optimize the store structure, and enhance the efficiency of the flat (the turnover generated by the area per flat). As of June 30, 2012, the group's Anta store increased from 29 to 7807, and sports life shops reduced from 198 to 689, while the company said that there were Children sporting goods The short-term development potential is huge, increasing the number of children's shops from 59 to 691, and further expanding its retail network.

Anta expects that by the end of 2012, the total number of Anta stores will be 7800-7900, sports life series stores will be 450-550, children's sporting goods stores will be 750-850, and the number of FILA stores will be 250-300. In addition, Anta will open more factory stores and discount stores to clean up the after season stocks.

But the company said it should be cautious about the short-term prospects of the domestic sporting goods industry. And how to deal with the challenges of international sporting goods brands, increasing inventory pressure and upgrading their brand image will be a difficult problem for domestic sporting goods companies.