PEAK CEO Xu Zhihua: Closing Shop Is Just A Superficial Channel Reform.

Less than p ago, in a stadium in Quanzhou, Fujian, PEAK hosted a great year-end wrap up conference.

In this conference, "dealers" became the most frequent word in the evening.

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< p > over the past 10 years, the sporting goods industry has achieved rapid growth. At the same time, the channels are also "barbaric growth". This has brought heavy burden to many sporting goods companies, and the pformation of channels is imperative.

According to incomplete statistics, the number of PEAK stores in 2012 dropped from 7806 in late 2011 to about 6500, and the size of the channel for the first time shrank.

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< p > < strong > PEAK CEO Xu Zhihua < /strong > /p >

< p > how does PEAK think about the crisis of the industry in the past year? Behind the closure of more than 1000 stores, what is the pformation of PEAK? A few days ago, PEAK CEO Xu Zhihua accepted an interview with reporters (hereinafter referred to as NBD) and gave answers to the outside world.

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< p > sports goods industry has been enlarged < /p >.

At the end of year wrap up conference, PEAK's highest award for PEAK's best dealer in the year is p BMW, but it can not hide the twists and turns of the industry in the past year.

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< p > NBD: over the past year, the sporting goods industry has been constantly running bad news such as intensified inventory, low price clearance and store closes. How do you think of the difficulties this industry faced last year? < /p >

< p > Xu Zhihua: I think the outside world has enlarged the sporting goods industry, perhaps because there are not so many companies listed in other industries.

In fact, the so-called difficulties and challenges we experienced last year were not only encountered by the industry, but also other industries in China, except for the food industry, such as insufficient demand and excess capacity due to overexpansion.

The capacity is too large and the demand is relatively insufficient. I think this is the core issue facing the industry.

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< p > NBD: what is the cause of this dilemma? < /p >

< p > Xu Zhihua: over the past 10 years, the sporting goods industry has been growing at a high speed. The rapid growth has led to our high expectations. But in 2010, the inflection point of industrial development appeared. The growth of market demand did not meet our expectations. However, we still asked the dealers to order according to the original high expectations, so the stock came into being.

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< p > store reduction is just a representation of < /p >.

< p > Xu Zhihua seems to be sensitive to the concept of "Guan Dian".

For the frequent exposure of the past year, Xu Zhihua believes that the reduction of PEAK store size comes from the active adjustment within the company.

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< p > NBD: as of September 30th last year, the number of PEAK stores is only 6739, which has been reduced by 1067 compared with the end of 2011. Why have we closed so many stores? < /p >

< p > Xu Zhihua: the reduction of stores is a representation. Our fundamental aim is to hope that the quality of each single store is even higher.

In the past, our channels still had a large number of outlets that made group buying business in the early days. The adjustment was mainly about this part of the outlets. Meanwhile, the stores with poor image and low quality were also cut down, so it would not have a big impact on us as a whole.

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< p > NBD: channel adjustment is the key word of the whole industry last year. What are the measures of PEAK? < /p >

< p > Xu Zhihua: we are currently promoting the refinement and flattening of channels, increasing more distributors, and developing some prefecture level or even county level agents.

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< p > NBD: what is the difference between the structure and the early stage of PEAK? Why do we need to make such adjustment? < /p >

< p > Xu Zhihua: when we just started, we developed many provincial agents, because they could carry out territorial management and service nearby.

But now a municipal agent can do tens of millions of sales a year, much more than a provincial agent at that time, so we can increase the number of agents at the municipal or county level.

In addition, the cost is rising now, flat management will reduce channel costs and enhance competitiveness.

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< p > channel reform is not urgent. < /p >

"P > channel adjustment is imminent, but the scale of the store will inevitably cause concern outside.

Xu Zhihua said that through the upgrading of stores, the scale will remain at a certain level, but channel adjustment is a "huge project" and can not be changed urgently.

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< p > NBD: what is the main plan for this year in terms of channel adjustment? Will it lead to the continued shrinkage of PEAK stores? < /p >

< p > Xu Zhihua: our main plan this year is to launch a brand new "seventh generation store".

Channel rectification must be continued, but the store has been rectify, also new, in the end the number of new open more or the number of rectify more, now is not good to say, but the number of stores will probably maintain at the end of the 2012 year level.

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< p > NBD: last year many companies had a series of problems in the process of channel adjustment. Did PEAK worry about the loss of dealers caused by the adjustment? < /p >

< p > Xu Zhihua: we are adjusting those dealers who are relatively weak in capacity. So far, there has not been a large loss of distributors.

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< p > PEAK has put forward the channel adjustment plan for 3 years, but has not asked for the plan to be completed overnight.

The channel must be flatter gradually, but the adjustment of the channel is a huge project. We must not change it, but we must not be too hasty.

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< p > NBD: how can PEAK avoid negative problems? < /p >

< p > Xu Zhihua: our general requirement is to actively and steadily push forward the channel reform, adjust the areas that are not well done, and encourage and support well prepared areas.

Around this goal, we have made some adjustments internally.

For example, we have developed some small customers (small dealers), because their capabilities are not very strong, so there are some differences in management. Some of the functions undertaken by agents now have to be borne by themselves.

Last year, we set up terminal retail management center. We will conduct some guidance to small customers, including training for shop clerks, promoting marketing skills of terminal products, etc.

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< p > NBD: at present, what is the effectiveness of PEAK's adjustment? < /p >

< p > Xu Zhihua: we have worked with us for a long time, but some dealers have asked us to make adjustments.

Because of their lack of capacity, the management of large scale shops is also difficult for them, and it is easy to lose money.

After adjustment, they have a smaller scope of control, more sophisticated management, and greater efficiency and output.

In fact, the result of adjustment is that many dealers make more money, and turnover is much higher than before.

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< p > 2013, do not make optimistic estimates < /p >

< p > although Xu Zhihua believes that the sporting goods industry has great potential in the long run, it is not known when it will cross the current "ridge", so there is no optimistic estimate in 2013.

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< p > NBD: will the industry situation be better than last year? < /p >

< p > Xu Zhihua: from the economic environment, the consumption capacity of the market in the past two years is insufficient and the demand is shrinking. Although the government will take some measures to promote the steady development of the economy in the long run, it can not be too optimistic and conservative in 2013.

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< p > NBD: what measures have been taken by PEAK? < /p >

< p > Xu Zhihua: our orders have been cut down. Besides, optimizing the product structure, upgrading stores and cutting stock are still the measures to be continued.

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