High Inventory Leads To Engine Difficult To Restart Sports Brand Listing Blocked

Although the Olympic Games were held, the companies had a rebound. But when the industry is still in the doldrums, can the brand sports apparel listed companies face the challenge as Nike once did, play the spirit of sport and pick up the baton of high growth?

　　 Industry dilemma: high inventory, easy time to make money to end

Time shifting is the opposite. In the first two years, because of the rapid growth and high expectations of the brand sports apparel listed companies, the recent rapid pace of development seems to have stopped abruptly.

Data show that the middle and low end brands represented by Lining, China trend, and XTEP, PEAK and so on are low in 2011 in the same period in recent years.

According to the financial report, Lining's inventory in 2011 has reached 1 billion 130 million yuan, almost two times that of 2008. The other big brands have huge stocks. Anta Inventory 618 million yuan, XTEP inventory 671 million yuan, 451 million yuan in the 31st degree inventory, PEAK inventory 421 million yuan.

In addition, the growth rate of Lining, Anta, PEAK, XTEP, 31st degree and so on has slowed down, and Lining's total income is only 8 billion 929 million yuan, with a negative growth of 5.8%.

Analysts believe that this shows that in the context of the slowdown in market size and stable competition in the industry, the expansion of enterprises has to face the situation of poor sales.

From the perspective of industry development, this seems to be the inevitable bottleneck. Dongxing Securities believes that according to the life cycle of the apparel industry, the domestic sportswear is in the second half of the mature period. Sports brand as a typical functional and occasion brand clothing, its target market is relatively small, such as leisure and other consumer goods. After experiencing the Enlightenment period of the 90s of last century, the growth period of 2000~2007 and the first half of the mature period from 2008 to now, the current market has shown more obvious signs of growth fatigue.

If any industry is in free competition, after a period of rapid development, there will be a phenomenon of oversupply. Once supply exceeds demand, inventory will be formed. It can be said that China's sporting goods industry has experienced super rapid development in the past 10 years, and the emergence of new domestic brands and the entry of international brands have also resulted in excessive supply, which naturally leads to high inventory and oversupply, and the slowdown in industrial development is a normal phenomenon. Zhu Meng, a consultant in management, said in an interview with reporters.

Qin Chong, a senior adviser to Frost & Sullivan, believes that the Olympic effect between the 2003 Olympic bid and the 2008 Olympic Games has also overdrawn consumption demand to some extent, which has led to an early turning point in the industry.

According to the introduction, China's brand sports apparel industry also ushered in a high-speed growth period in 2009, and the related companies in the capital market were more eye-catching. Lining's stock price soared in the year, and maintained its upward trend for most of the year, and reached a high level of HK $31.95 / share in mid 2010.

Qin Chong said that the strength of many domestic sporting goods enterprises in technology development, product innovation and marketing has yet to be improved. Many enterprises are not good at catching up with the new trend, developing new products and opening up new markets when the existing market demand is gradually saturated. Therefore, the dilemma encountered by domestic sports brands can be attributed to the overlapping of internal and external factors.

　　 Nike Experience: seize the opportunity to reverse

In fact, the brand sportswear industry has always regarded Nike as the vane of development. When Lining and other companies were listed, the market gave higher valuations, largely due to the good performance of Nike in the US capital market.

Nike also once experienced a downturn of fierce market competition and strategic mistakes. After a series of adjustments, Nike regained the first place in the market. More importantly, Nike's subsequent stock price performance is still huge, giving investors huge returns.

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Statistics show that Nike has experienced a rapid growth of ten years in 1972~1982, and the company's performance in 1983 ~1985 plummeted, and its share price also dropped to a low of about 0.3 dollars at the end of 1984.

After the turning point of the late 80s, Nike retook the first place in the US market at the end of 1989 and embarked on the stage of sustained and rapid growth in its performance. Its share price also rose from 0.30 US dollars in November 9, 1984 to US $94 in November 4, 2011, or 321 times, much higher than the 7.5 increase in the same period of the S & P 500 index.

Can Nike's development provide some reference for investing in domestic sports brands?

Qin Chong believes that the development process of Nike has many advantages for domestic sporting goods enterprises, such as being good at catching up with the latest trends and trends in the market, reflecting and adjusting existing strategies in time, and constantly strengthening their own R & D and marketing capabilities.

　　 Local brand Out of difficulties and orderly

"After a series of adjustments, the industry will strike a balance." Zhu Meng said.

But for the development prospect of brand sportswear, analysts have different views. Xiong Xiaokun, a light industry researcher at CIC, believes that the market demand will remain strong for a long time under the premise of such a large scale of China's consumer population. With the upgrading of domestic consumption, there will be more and more people buying high-end sports brands in the future, still looking at the good industry prospects.

Hongkong's agencies believe that most investors are looking down on the sporting goods sector, saying that even if the doping is added to London Olympic Games, the sector is unlikely to improve significantly.

Zhu Chenye, vice president of 31st degree, recently said that the growth rate of local sports brands before returning to 20% to 30% per year has been unrealistic. From the start of the 2013 order situation, next year is still a difficult year for local sports brands. She believes that China's sporting goods industry will return to the track of rapid growth after 2014.

China Merchants Securities believes that even if the local sports brands need to get out of the predicament, there is a priority. For example, the trend of Lining and China will be better in the second half of next year. But the dilemma of other brands is just beginning. These brands need more integration and adjustment. Competition will be more intense. Overall, Anta and PEAK will have better prospects.