Decline In Prudent Strategy To Become The 31St Annual Report Keywords

< p > "performance decline" continues to spread in the sporting goods industry as a curse.

The company, which has always boasted of its smooth operation, is also unable to escape the curse of declining performance.

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P issued a profit warning in January this year. It is expected that net profit will drop by about 40% in 2012.

It turned out to be the case.

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2012 is the most difficult year in the industry since the company was founded in 2002, the sports a target= "_blank" href= "http://www.91se91.com/" > dress less than /a, and the unfavorable market situation in 2013 is expected to continue. "P"

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< p > 31 degree is very similar to the problems faced by our peers. After experiencing a period of high growth rate driven by sales volume, China's local sportswear brands are facing unprecedented crisis. Terminal sales slowdown, inventory increase and channel pressure surge will eventually lead to a reduction in overall sales, gross profit margins and sales costs.

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< p > in the face of oversupply of market environment, prudent strategy has become the key word in the annual report.

In order to clear up the excess supply, the control of the inventory level of the sales channel was increased, and a number of orders that were ordered but not yet produced were cancelled.

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< p > there is no doubt that in 2013, for the whole local sports brand industry, "going to stock" is still the theme, this is a matter of life and death; and the development of differentiation outside the theme is a way out, because it determines the height of each company's rebound.

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< p > 31st degree, the development of sportswear industry will not be driven by sales volume in the past few years, but on the contrary, sportswear companies must win the market share with unique brand image, innovative design, good quality and high performance products and new product lines.

In restoring performance growth, they will hope to be entrusted to children's clothing business.

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< p > this card, is it right? < /p >

< p > failure to decline in performance: Curse /p.

< p > 31st 2012 earnings report shows that the company's revenue during the period was 4 billion 950 million yuan, down 11.1% from 5 billion 568 million yuan in 2011, and 715 million yuan net profit, down 38% from the same period.

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< p > in the terminal market, the same quarter sales in the first three quarters of last year continued to slow down (6.9%, 5.1% and 4.1% respectively), although there was a slight rebound in the fourth quarter, compared with the same store sales growth in 2011, the growth rate in 2012 was significantly reduced.

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< p > for the decline of net profit in 2012, 331 degrees explained that after the fast growing period of sales driven by sportswear industry, China's local sportswear was oversupplied, the average selling price and gross margin of its products were dragged down, and the competition in the industry was fierce and the business environment was difficult.

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The average selling price of < a target= "_blank" href= "http://www.91se91.com/" > clothing "/a" decreased from 94.7 yuan per piece in 2011 to 79.4 yuan last year, the annual report of < p >

Its gross profit margin was 39.8%, down 2.6 percentage points over the same period last year.

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< p > 31 degrees, the gross profit margin is the result of internal production of < a target= "_blank" href= "http://www.91se91.com/" > shoes < /a > Products decline and clothing production cost rise.

In July 2012, special precautions were taken to reduce orders for autumn and winter orders. This resulted in a decline in the output of footwear produced by internal production, thereby making it a higher recurrent expenditure for 31st degree.

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< p > its earnings report showed that the order of 31st order decreased by 10% and 26% respectively in the autumn and winter order meeting in 2012, and the order in spring and summer in 2013 and the autumn order meeting decreased by 23% and 19% respectively compared with the same period last year.

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< p > in addition, the cost of garment production has increased, which means that the gross profit margin of clothing products needs to be lowered so as to maintain competitiveness in the oversupply of sports apparel and fast fashion brands.

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In the face of the difficult market situation and changing consumer demand, the company has implemented a plan to ensure that the better stores continue to maintain competitiveness and profitability, P < 331.

The plan includes a total of 203 million yuan direct decoration allowance to eligible stores to enhance the layout of interior decoration.

The cost has been included in sales and distribution expenses.

At the same time, sales and distribution expenses also include the group's recent hiring of sports star endorsements, as well as the amortization expenses of the official clothing sponsor of the second Nanjing Youth Olympic Games in 2014.

Because of the above two reasons, sales and distribution costs increased by 17.9% compared with last year, accounting for 2.7% of the company's turnover.

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< p > no improvement has been made in inventory.

The average daily turnover of inventories increased to 56 days at the end of last year, compared with 40 days in the same period last year, and the stock balance was 460 million yuan, an increase of 9 million 500 thousand yuan over the same period of last year.

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< p > in the face of high inventory, the retail sales of goods at a retail discount level, the cancellation of orders for some orders, the reduction of the scale of retail outlets, and the strengthening of marketing efforts are faced.

In the fourth quarter of 2012, the net increase in licensed retail stores was only 12, of which 108 were newly opened shops, and 96 were closed.

At the same time, it also meets the changing needs of the market by developing new products and adjusting product mix.

All these factors lead to a decline in profits.

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< p > in fact, due to the global economic downturn and the sluggish sales of Chinese market, most of the sports brands in 2012 declined in both turnover and profit and inventories rose overall.

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< p > Lining (02331.HK) 26 released 2012 performance report shows that the company's annual income was 6 billion 739 million yuan, a year-on-year decrease of 24.5%, gross margin of 2 billion 550 million yuan, a decrease of 36.9% over the same period last year, a loss of 1 billion 979 million yuan, 1821 stores closed, this is Lining's worst performance since the listing.

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< p > Anta sports (02020.HK) 2012 annual report shows that in 2012, the company's operating income was 7 billion 623 million yuan, with net profit of 1 billion 359 million yuan, down 14.4% and 21.5% compared with the same period last year.

This is the first time Anta has faced declining performance since its listing in 2007.

At the same time, Anta also said that this year will continue to reduce 475 -575 stores.

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P, Nike, also failed to escape.

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< p > Nike's 2013 quarter fiscal year second quarter financial report shows that China's market revenue is $577 million, the first time it fell by 11% compared with the previous year. Nike's global earnings report revealed that since the third quarter of the 2012 fiscal year, the growth of orders in Nike China has slowed down significantly, even showing a decline of two consecutive quarters.

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Nike has also been infected with the "inventory plague" sweeping China. P

At the investor conference in the second quarter, Nike chief financial officer DonBlair said that China is still the focus of Nike's inventory management, and Nike is striving to reduce inventory problems in China, mainly through measures such as increasing discount rates and reducing futures orders.

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< p > embarrassed "sandwich biscuit" < /p >

< p > horse race enclosure and scale expansion are the main competitive means of many sports brands.

Thirty one degree is no exception.

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< p > data show that the total number of exclusive distributors is 31, and these distributors supervise 3336 authorized distributors. These authorized dealers own and manage 8082 adult sportswear retail outlets, a net increase of 217 compared with 7865 last year.

About 72% of new stores are located in three lines and smaller cities.

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< p > in fact, in the early days of the establishment of enterprises, the major cities attacked by the foreign giants Nike and Adidas attacked the two or three tier cities. Relying on sports marketing, the brand exposure rate was rapidly raised, making the 360 degree high growth on the less competitive runway for many years.

However, the industry gold has passed ten years, and the era of relying on distributors to set high indicators and enhance shops' performance in a large scale is gone forever.

Before 2011, the blind expansion, the double effect of high order and low sales rate made the inventory of more than one hundred and thirty one cent stock up, the industry oversupply. Even Nike, who had strong advantages in brand and distribution ability, could not get rid of the problem of high inventory.

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< p > no matter local brands, or foreign giants such as Nike and Adidas, the discount sale war for cleaning up stocks is getting more and more popular.

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< p > Lining's previous announcement indicates that as of June 30, 2012, the number of factory shops has reached 271, and the company will continue to expand the scale of factory stores.

Anta also said that in the face of the high inventory risk of retail channels, Anta has taken a number of measures to respond quickly, including the establishment of factory shops and discount stores in various places to help clean up the post season inventory.

Anta has also adjusted the number of orders that have not been produced and shipped with the distributors to reduce potential stock and discount discounts. PEAK also began to actively adjust orders, reduce market supply and optimize channels from last year.

Strengthening factory store construction seems to be a great help for all major brands.

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"P > is in sync with all local brands, and Nike and other foreign brands are also overweight.

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< p > there is news that Nike plans to open 40 to 50 factory stores, which is much larger than before. New factory stores will extend from first tier cities to two or three tier cities, and their sales will remain at a low price of 3 to 60 percent off.

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< p > insiders pointed out that Nike had long been sinking into the two or three tier cities, while consumers in the two or three tier cities had different appeals. The latter was relatively sensitive to price, and started shop in two or three line cities, instead, it provided a solution for Nike to solve the inventory problem.

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< p > in the winter of the industry, foreign brands with strong brand advantages are more ruthlessly layout the three or four line channels which belong to local brands than local brands, which can be imagined for the impact of local brands.

The key way, CEO Zhang Qing, a sports information company, points out that if Nike adopts a low price strategy, it will affect the progress of local brands' inventory clearance.

Some second-line local brands may face a survival crisis.

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< p >, for the 31st degree, its position in the industry and XTEP (01368.HK) are the same as the second ladder brand in the industry.

Compared with foreign brands and local brands such as Lining and Anta, the 31 degree product is obviously not more sticky to users than they are.

Under the circumstances of general price reduction promotion, foreign brands and local brands, sinks the competitive pressure of 360 degrees, and the living space will also be squeezed.

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< p > bet children's wear < /p >

< p > facing the approaching of foreign brands, some local brands have made corresponding adjustments.

For example, Anta began to enter the high-end market by acquiring the trademark and business of Italy brand Fila.

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< p > PEAK (01968.HK) said that on the basis of basketball as a theme, it will also enrich other categories, such as running series, women's series, and so on.

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< p > Lining's strategy is to test the annual growth rate of the outdoor sports market which is more than 40% and the market size is close to 11 billion.

According to reports, Lining recently went to Germany to attend an outdoor brand exhibition in Munich, accompanied by other companies such as ADI.

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< p > 360 degrees, then choose to open up new market. --2010 launched a new brand "Shang" across the border between sports and fashion.

It is understood that "Shang" is positioned in the high-end sports and fashion market, with the purpose of making up for the gap in the high-end market and fashion movement.

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< p > it aims at young fashion people who love sports, such as college students, enterprise white-collar workers, "a target=" _blank "href=" http://www.91se91.com/ "designer" /a ", street sports enthusiasts and so on.

The financial report of 31st degree did not give a detailed introduction to the operation of the brand.

But compared with XTEP, which has already killed a bloody path in the sporting goods market with the concept of "fashion movement", it is no easy task for the "Shang" brand as a later member to have a share or even surpass.

Like XTEP, the "Shang" brand will inevitably be squeezed by the casual fashion brand with "fast fashion" as its selling point, and will fight fiercely with its peers.

We also need to solve the problem of how to ensure that products are not replaced or marginalized by leisure brands and comprehensive sports brands.

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The only bright spot in P's earnings is children's clothing business.

According to the 2012 earnings report, the turnover of children's clothing series increased by 97.7% to 370 million yuan, accounting for 7.5% of the company's turnover last year, almost double the previous year.

Average selling price and sales volume increased by 25.7% and 57.1% respectively.

The average wholesale price of children's clothing is 57.3 yuan.

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< p > up to December 31, 2012, there were 1590 children's clothing stores in 331 children, a net increase of 433 compared to December 31, 2011.

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< p > 360 degrees, the future will be cautious in the expansion of adult sportswear business, and will not set goals for the number of shops this year.

The children's wear business will set up about 150 stores in 2013 to excavate China's large and early childhood market and promote its overall business growth.

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Less than P, however, I hope that the development of children's clothing will be more than 360 degrees.

Famous foreign brands Adidas and Nike entered the children's clothing market as early as 2001 and 2002.

According to the China National Business Information Center, Adidas and Nike children's wear occupy the top two market share of children's clothing in recent years, occupying about 4%.

The success of Adidas and Nike has witnessed the market opportunities for the domestic sportswear brands. In recent years, the market has also begun to nugget children's clothing market.

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< p > July 2008, Anta launched the Anta KIDS brand, mainly facing children aged 3 to 14, whose products mainly include two styles of sports and life, including clothing, shoes and accessories. In early 2010, Lining launched the brand name LiningKids with Li Ningtong, the brand name of the local children's wear brand. In the same year, 9% of the listed fund raised (about HK $180 million) was invested in the research and development of the brand of children's clothing.

In 2011, XTEP launched the brand name "Xtep+1" children's shoes and clothing series, targeting children aged 2 to 14 years old, attacking the high-end leisure fashion market.

As early as in 2006, XTEP signed a cooperation agreement with the US Disney company, and entered the market of children's shoes and clothing with the help of the Disney brand "curve".

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< p > 2012, Anta turnover fell 14.4% to 7 billion 623 million yuan, net profit fell 21.5% to 1 billion 359 million yuan.

In the same period of decline in performance, Anta also increased the pace of development of children's sporting goods series last year, and the number of shops increased from 632 in 2011 to 833.

It is estimated that by the end of 2013, the total number of children's sporting goods stores will reach 950~1000.

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< p > industry pointed out that the number of new born population will increase in the next few years, and naturally it will increase the demand for Chinese children's children's clothing, which may be a new direction of pformation for the sports brand in the predicament.

However, the phenomenon of homogenization of adult sports brands is very serious, and the development of children's clothing may also be difficult to escape.

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< p > China children's industry research center points out that children's clothing stores in the two or three line cities become the main channel of children's clothing of the domestic sports brand, which not only accords with the characteristics of children's wear monopoly, but also closely related to the distribution of the two or three tier cities based on the commercial form of pedestrian street.

But it is important to note that the sustainable development of franchised stores depends on the brand's appeal.

At present, the recognition and differentiation of domestic sports brands are not obvious.

With the growing maturity of consumers' purchasing environment and ideas in two or three tier cities, and the gradual infiltration of more international and joint venture brands, the advantages and price advantages of such channels will be weakened.

In the field of children's clothing, apart from the expansion of channels, they should also intensify efforts to establish the uniqueness of the brand and make more efforts from the connotation of the brand.

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