Lining's Profit Decline Indicates That Operation Capital Has Improved.

With the announcement of the 2014 annual report card of Lining, the last sports shoe and clothing company recently, all sports Shoes and clothing The performance of the giant has also been determined.

Although Lining said in the annual report that the group's performance in 2014 was "gratifying", and "the channel store network is stable, the dealer business has begun to grow", but the net profit in the background of steady increase in turnover has declined sharply. In its annual report released on the 19 th of this month, the company reported a turnover of about 6 billion 728 million yuan during the reporting period, an increase of 15.5% over the same period last year, but net profit loss was 781 million yuan, down 99.2% from the same period last year.

In this regard, Lining explained: "at present, the group's operating capital has improved. With more attention to the improvement of the retail operation capability, Lining has invested more resources in the direct store network and the five core brands, which has also had a greater impact on the group's operating cash flow."

The listed companies such as Jinjiang and Lining, led by Anta, seem to have split up in terms of inventory, profit performance and so on. This leads to the problem of shutting down stores and holding investments due to the problem of capital chain, which also has a great impact on the brand layout in the coming years.

Inventory crisis

Compared with the pace of Lining's going out, the other three main competitors, Anta, XTEP and 31st degree, were relatively stable. Anta reported a turnover of about 8 billion 920 million yuan in the reporting period, an increase of 22.5% over the same period, with a net profit of about 1 billion 700 million yuan, an increase of 29.3% over the same period last year. It has stabilized the competitive advantage of Lining in terms of total market volume and growth rate.

And the second army in the shoe and clothing matrix, the smaller total XTEP and the 31st degree turnover, all gained 9%-10% growth, and the net profit growth rate of 31. 88.2% was the best among their peers.

The competition between Anta and Lining in the mainland market was particularly intense in 2014. market People told the twenty-first Century economic news reporter that the performance of the two companies in the inventory cycle, marketing investment and store expansion and other links showed the company's operational health.

According to the reporter's statistics, in the latest annual reports of the four sports brand listed companies, the average stock turnover day is one of the shortest days in Anta, the 58 day, the 31st degree, the XTEP and Lining respectively complete the inventory turnover in 77 days, 91 days and 109 days respectively, while the high inventory pressure and the long supply chain cycle have been the most important core topics of the local garment industry in the past two years.

Lining disclosed: "at the level of commodity operation, in order to improve the quality of orders and speed up the response to market and consumer needs and trends, the company continues to promote the order listing order replenishment quick response mode" product IPO "process. At the same time, in the whole quarter of the year, we also targeted the sale of unsalable products off the shelves to discount stores, and sold shelf space for selling products at the premium stores.

Open up new business

Sports marketing has always been the most valued and most criticized part of sports shoes and clothing enterprises at home and abroad. The situation of repeated funds leaning too much and the result of repeated performance have repeatedly appeared. In the 2014 annual reports, Lining, the most unsatisfactory performance of net profit, became the most popular advertising brand by 19.3% of advertising and publicity expenses. Anta, XTEP and XTEP accounted for 12%, 13.1% and 11.2% respectively.

"Sports brand must always abide by the delicate balance in advertising investment. Too little investment will lose the reputation of the market, and too much cost will make the enterprise unable to bear heavy burden in the current difficult stage." The senior people said frankly.

It is understood that in 2014, Anta was suddenly "high-profile" in the competition with Lining and PEAK. It not only sponsored the national gymnastics, weightlifting, wrestling and judo national teams for the first time, but also allied with NBA China to launch joint brand products in China, and at the same time, it made the award dress for the Chinese sports delegation at the Sochi Winter Olympics and the Inchon Asian Games.

Recently, Ding Shizhong, chairman and CEO of Anta's board of directors, said: "Anta's retail oriented measures have made good progress. As our orders continue to record positive growth, the company has become the first domestic sporting goods brand enterprise to improve in the industry." He summed up Anta's market performance in 2014 as "its differentiated and cost-effective products continue to grow, coupled with significant growth in other businesses, especially children, Fila and e-commerce."

For example, GAP, ZARA and other casual wear giants have been competing for children's wear. brand Also follow the foreign brands such as Nike (NIKE), Adidas (Adidas) and other foreign brands in the field of children's shoes and clothing to tap the new growth point of the industry. Ding Shizhong revealed the specific layout plan: "in 2014, the number of Anta children's stores was 1228, an increase of 347 compared with 2013, and the target of 2015 will reach 1500-1600. At the end of 2014, FILA had 519 stores, 103 more than in 2013 and 550-600 in 2015.

The well-known clothing industry commentator Ma Gang said that the children's wear market has been developing rapidly in recent years, and different enterprises have different path choices. In the short term, it is not possible to prove which pattern is better. Anta children find their own way of development which is suitable for their own resources and their own laws through their own exploration.