Hidden Danger Of Blind Expansion Of Sports Brand In China

At the time of economic downturn, another sports brand industry is being dragged into the mire.

Recently,

When the company issued an early warning for annual losses, Jin Zhenjun, executive vice president of the company, said that in order to save costs, Lining had closed 1200 stores in the first half of the year.

Insiders said that if sports brands want to get out of the "cold winter", they need to have a clear positioning, clear brand positioning, show brand uniqueness, and enhance their differentiation competitiveness.

Business is in trouble.

In July 4th, Lining, a domestic sports brand, was declared bankrupt in Spain because of the deterioration of the market environment and its poor management. In August 22nd, the semi annual report released by Li Ning Co showed that the company's first half operating income decreased by 9.5% at least 3 billion 880 million yuan, and its net profit dropped by 85% to only 44 million yuan. In September 12th, Li Ning Co's headquarters in Hongkong's Tsim Sha Tsui branch closed.

At the same time, the Li Ning Co issued an early warning for the annual loss. Jin Zhenjun, executive vice president of the company, said that in order to save costs, Lining had closed 1200 stores in the first half of the year.

More than Lining's orders have been reduced, and profits have been seriously depleted.

Anta's semi annual report also shows that profits have been seriously affected by high inventory levels and large discounts.

According to the earnings report, XTEP stock is 671 million yuan, and the stock price is 451 million yuan.

According to media quoted independent critic Ma Gang, the most obvious in Sichuan area is China's trend stores.

He said that official data were not yet available, but according to his understanding, some of the stores in China should be suspended.

Many places could see their stores before, but now they are not.

Bad news keeps on, Semir.

And other clothing brand semi annual report shows that since this year, with the substantial increase in inventory, the primary problem of development is to adjust stores.

According to media reports, Lining closed stores, while Anta added stores to two and more secondary businesses, but the two methods were not effective.

Zhu Qinghua, a light industry researcher at CIC, said in an interview that first of all, the high inventory situation affected the sales revenue and business profits of the major brands this year. Secondly, the increase of rents and labor costs greatly squeezed the profit margins of the company. Finally, the sports brand competition was fierce, and the sports brands had a discount sale. However, the sales volume could not be greatly improved by the market demand, which led to the overall profit not rising or falling.

Sports brands should take active measures to face the current predicament.

Hidden dangers of blind expansion

In recent years, due to serious homogenization, blind expansion and economic weakness, sports brand products in China have reduced purchasing power.

Resulting in the emergence of different brand inventory problems.

Zhu Qinghua told reporters that the annual turnover of sports brands from the top ten in China is about 23 billion yuan. The inventory digestion of domestic sports brands takes about half a year to a year.

Once the stock situation is improved, the sports brand will usher in a new development.

According to a data from Dongxing securities, the number of newly built sports brand enterprises listed in China from 2007 to 2009 increased by nearly 2, and the number of terminals in 2009 increased by 2 times compared with the end of 2006.

In fact, in 2010, our country

The expansion of enterprise stores is like a wild horse running wild.

According to one data, the top three or four enterprises almost broke through 7000 customs gates at the same time.

In view of this, the rapid speed of "grabbing land" aggravated the internal conflict of the channel and brought hidden trouble for high inventory.

How can enterprises reclaim themselves? Zhu Qinghua suggests that we should have a clear positioning, clear brand positioning, show the uniqueness of the brand, enhance its differentiation competitiveness, help consumers understand the product better, and be a sharp weapon for enterprises to win. Besides, establishing a good brand image can enhance brand awareness and influence, and effectively enhance the performance level. Finally, we must improve the management system, strictly control the cost of enterprises, and reduce the cost pressure to alleviate the financial pressure of enterprises.