Sports Brand: Agent Mode Leads To The Development Of High Inventory Development Mode.

China Sports brand The tragic situation was not reversed because of the London Olympics. On the contrary, high inventory and wholesale agent mode have made China's local sports brand in a more difficult position.

　 Closing shop tides

Recently, Lining, a famous sports apparel retailer in China, released a report that its net profit fell 85% to 44 million 300 thousand yuan (7 million US dollars) in the first half of this year. The gross profit margin in the second half of the year is expected to be close to 44.2% in the first half of this year, down from 47.3% a year ago.

As early as June this year, the company issued an early warning that profits will drop sharply this year. In July, private equity fund TPG put Kim Jin-goon, one of its partners, in the position of Li Ning Co executives in an attempt to reverse the decline. But Jin Zhenjun said that the outcome of the recovery plan will not begin until the second half of next year, and that the company's worst time is ahead.

Li Ning Co said it has taken measures to control the cost and efficiency of new stores, and has closed 952 brand stores since the end of last year, with more than 7300 stores.

Coincidentally, PEAK sports's daily report shows that the company's total revenue has been reduced by 28.5% yuan to 1 billion 610 million yuan from 2 billion 256 million yuan, and net profit has decreased by 43.3% to 240 million yuan. By the end of June, the number of PEAK sports outlets in China decreased by 747 to 7059 at the end of last year. According to PEAK's retail network optimization plan, by the end of 2012, the number of retail outlets will also be reduced to 6500.

In fact, the decline in performance of Lining and PEAK is only a microcosm of the decline of the local sports brand industry. From the semi annual reports released by China's major sports brands, such as Anta, XTEP and 361 degrees, the overall performance of the local sporting goods industry is not optimistic.

Data show that Anta's turnover in the first half of the year was 3 billion 934 million yuan, down 11.6% compared to the same period last year, and net profit was 770 million yuan, down 17% compared with the same period last year. The turnover in the first half of 361 months was 2 billion 869 million yuan, a decrease of 9.9% over the same period last year, with net profit of 596 million yuan, a decrease of 23% compared with the same period last year. Even the most brilliant XTEP in its report card, its net profit in the semi annual report has only kept an increase of 0.3%, while its total revenue has increased by a small margin. In the first half of the year, the total number of Kappa brand stores in China has been reduced from the end of the year to the present, and the decrease has reached a decline.

Agency mode leads to high inventory

Recently, the reporter visited Beijing. clothing The market is informed that Lining, 361 degrees, Anta, XTEP and other Chinese sports brands are on sale. In the sports brand area of a shopping mall in Beijing, a promotional advertising of "29 yuan for summer wear" and "69 yuan for sports shoes" has been launched, and even some sports brands have achieved a discount of 66% off, which is unprecedented.

It is understood that the past ten years is the "golden ten years" for the development of China's sports brand, and the whole industry has maintained two digit annual growth. Before and after 2000, the movement of China's bid for the Olympic Games was a trend in the whole country. Especially after the successful bid of Beijing's Olympic bid, the sporting goods market in China showed a blowout trend. The main sports brands were as many as twenty, which is very different from the market structure of only three to four major sporting goods brands in other regions.

But in recent two years, the speed of domestic sporting goods has been greatly reduced. "Now you can buy a body with more than 100 yuan. And in the past it needed at least two hundred or three hundred yuan. " Facing the current crazy sales promotion efforts, a salesperson in a shopping mall in Beijing seems very helpless.

Why did the sports brand that was once profitable look suddenly changed? In the view of Zhang Chunyu of the industry, compared with foreign brands, the extensive agency mode of the domestic brand and the huge distribution network indirectly lead to an increasing proportion of their stock, and the reputation of the brand is also greatly reduced.

At present, domestic clothing enterprises generally use the agent distribution mode of "brand dealers wholesalers (agents) retailers" in sales channels. This mode is slow and inaccurate in response to market supply and demand, and often causes agents to order more goods for goods to be discontinued, and commodity dealers also store more commodities for replenishment, which will form a "false appearance" of demand being magnified.

The owner of a sporting goods store near Beijing Sport University told reporters that the anti risk ability of this model is very poor compared with the foreign direct brand mode. Once demand falls, it will lead to High inventory 。

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Development pattern change

As for the decline of the performance of China's local sports brands, Zhang Tao, vice president of Anta Sports Products Limited, believes that the advantages of the demographic dividend are exhausted, and that the difference between domestic and foreign brands is evident when the sports brand returns to the level of regular competition.

Experts predict that after ten years of gold, China's sporting goods industry has entered a period of adjustment. In the elimination of the local sports brand, it will eventually be concentrated from the current 10 to 20 brands to 5 to 6. In Zhang Tao's view, the next brand competition will focus on Sports subdivision, if it can not adapt to the situation, it can only be eliminated.

At present, high inventory has made local sports brand enterprises realize that cleaning up inventory and changing the development mode has become an expedient measure for the industry to break through. Li Ning Co has announced that the company will reduce inventory as its number one priority. Lining will need to make greater efforts to clear up inventory in the sales channel when the economic slowdown is affecting domestic demand.

"Some special items of shoes require very high technological and technical requirements." Bai Eryu, vice president of the Beijing track and field association and director of the scientific research department, said that a considerable proportion of the people wear foreign brands now, because these brands have their unique characteristics and can be widely recognized by excellent athletes.

The owner of the sporting goods store told reporters that although the average consumer demand for sports products is not so high, professional athletes have high requirements for sporting goods. Only by increasing investment in sports products, can we narrow the gap between sports brands at home and abroad.

For local sports brands, there is a view that this is a correction of the sudden growth of the past hurricane. With the slowdown of the market scale and the stability of the industry competition pattern, the sports brand must rely on the rapid expansion of the marketing network, increase the number of stores to enhance the extension stage of the performance, and spanform it to rely on improving enterprise management, improving technology and product innovation ability.

Insiders pointed out that the reshuffle of the terminal market has started in the number of Brand Company stores. And if the sports brand wants to break through in the changing situation, these initiatives are just beginning.