Li Ning'S Net Profit "Diving" Local Sports Brand Clothing Is Hard To Find "Spring" In The Short Term

Li Ning Group's net profit "diving" also leads to the top 6 local companies Sports brand The current situation of collective downturn. Industry insiders pointed out that local sports brands are living in the "winter" collectively. Blind expansion to gain market share, lack of innovation in products based on imitation, etc. are the main reasons for serious decline in performance. However, in the next 2-3 years, these enterprises will still be difficult to usher in the "spring" of recovery.

Li Ning Group's net profit fell by more than 80%

A person in charge of Li Ning Group told the reporter that the group's profit has shrunk seriously mainly because it is in the reform stage and "is determined to make great efforts to solve historical problems to better realize future recovery". In the first half of the year, the Group optimized its organizational structure, resulting in increased costs. In addition, the decline in the inventory value of the group's agent brand lotto also increased the company's one-time expenses.

The "historical problem" mentioned by the company mainly refers to high inventory. Data shows that the inventory of Li Ning Group in the first half of the year was 1.138 billion yuan. Li Ning Group said that in the second half of the year, it will further build a clearing channel by increasing discounts and promotions. At the same time, we will further adjust the layout of retail stores and improve retail management capabilities.

The above person in charge also disclosed that in order to adjust the layout of retail stores, the Group closed 952 inefficient stores in the first half of the year. At present, the number of regular stores, flagship stores, factory stores and discount stores nationwide still reaches 7303. "The business model that used to rely excessively on opening stores has met the bottleneck of development. We hope to solve the problem of excessive expansion and focus on improving the sales efficiency of existing good stores, which is the foundation of long-term development in the future." said the person.

Local sports brands live in "winter" collectively

For the profit shrinkage of Li Ning Group, Guangdong Province clothing Clothes & Accessories Li En, vice president of the industry association, believes that Li Ning and other domestic sports brands are experiencing transformation pain due to blind expansion and imperfect supply chain mechanism. "This sharp drop in profits can be seen as an early release of risks, marking the revival of Li Ning Group," said Li En.

In fact, it is not only Li Ning Group that is troubled by the decline in performance. Local sports brands are experiencing a "cold current" collectively. Data shows that in the first half of the year, except for the slight increase in revenue of "Tebu International"; Anta decreased by 11.6% year on year; 361 degree decreased by 10% year on year; Peak decreased by 28.5% year on year; China's trend fell 29.4% year on year.

Senior securities researchers believe that the decline in the performance of local enterprises is "not a cold day". In addition to market space being squeezed, local sports brands failed to predict the market consumption capacity after going public, blindly accelerated the store layout, and strived for market share, which led to high inventory and ultimately dragged down the performance.

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Experts believe that "horse racing enclosure" is essentially a kind of extensive business mode, leading to the emergence of a flourishing bubble of sports brands. With the impact of clothing segmentation on the sports market and the need for reform of the business model, the bubble will burst faster.

One direct consequence of "horse racing enclosure" is stock High enterprise. Wange, an analyst with China Investment Group, believes that the inventory problem affects the capital turnover and the sustainable operation of the enterprise, while the inventory digestion through discount promotion will affect the brand image of the enterprise, and the poor sales in the current quarter will affect the time and style types of new products in the next quarter.

At the same time, experts believe that because local enterprises started in the way of substitute processing, they lack the ability of R&D and innovation, their products imitate each other, and the phenomenon of homogenization is serious, so their ability to resist cyclical demand decline is weak.

"Cultivating internal skills" may usher in "spring"

Industry insiders believe that because the current production capacity and store layout of local sports brands have basically reached saturation in China, it is difficult to usher in the "spring" of recovery in the next 2-3 years.

Experts believe that local sports brands should resolutely close inefficient stores, reduce operating costs, improve single store business performance, and end the bubble era of blind expansion.

Industry experts pointed out that the advanced experience of Adidas and Nike may be worth learning. First of all, excellent product quality and leading style make them popular in the market. The replacement rate of new products of these two brands is high, and each new season's products entering the store are refreshing. In addition, the product segmentation is in place, and swimwear, children's clothing, yoga and other types of products cater to the needs of more consumers.

"Domestic sports brands should not fight with rivals, but with the market." Li En pointed out that the success of enterprises will win by brand and operation mode. The urgent task of domestic sports brands is to find out their own personality and core competitiveness, accurately position, and dig out the unique brand connotation.

Relevant experts believe that at present, local sports brands are in the stage of differentiated competition, and the era of winning by volume is no longer returning. "Cultivating internal skills" is a "required course" that enterprises cannot relax at any time. Subdivide fields, improve product quality and update Design The concept and customer experience may bring a way out for local sports brands in difficulties.