The Specific Operation Of AND1 Is Still To Be Observed.

Last week,

Announced the announcement of the acquisition of basketball equipment brand AND1 in the next 31 years in the Greater China region exclusive trademark operation rights.

In the eyes of the industry, there is not much advantage in the battlefield of traditional sports equipment.

The reason for massive investment should be to diversify the risks of declining profits.

However, given that AND1 has lost its peak creativity, this cooperation seems to have only added a bargaining chip to capital negotiations.

The main business dilemma, new

The lack of operational capability is still a difficult problem for the birds and birds.

Introducing AND1 into China

although

Its popularity is not as good as that of Nike and Adidas, but it is no stranger to Chinese consumers.

The exclusive agent AND1 is also the first crossover for the company since it established its multi brand strategy in 2013.

According to the strategy of the noble bird, the two sides will divide the cooperation into several cycles. Within each cycle, the AND1 will be paid the minimum guarantee for millions of dollars.

Among them, the minimum authorized payment of $2 million 200 thousand before June 30, 2022 will be paid in the next 25 years with a minimum authorized margin of five years in one cycle.

The total cost of the paction amounted to at least 26 million dollars.

In fact, as early as 2003, AND1 entered the Chinese market with the "Street Fever".

AND1, the main street basketball player, has become a familiar basketball equipment brand for Chinese fans through Yao Ming's NBA craze for China.

But for many years, AND1 has no official licensed brand operators in Greater China. The products on the market are mostly products sold by unauthorized dealers, and some are even fakes.

The introduction of AND1 to expand the product line reflects the decline of the main brand of the bird.

In 2012, the $2 billion 800 million worth of birds came down to 1 billion 970 million yuan at the end of last four years.

At the same time, the net profit was also reduced from 500 million yuan in 2012 to 150 million yuan at the end of last year. Net profit in 2015 was only 33% of that in 2012, and net profit in the four years was down 66%.

From last year's annual report, the business revenue of costumes and accessories products of the costumes declined. Compared with the same period last year, the footwear sector only increased by 7%.

The latest semi annual report in 2016 showed that the net profit of the noble bird was 157 million yuan, down 9.9% from the same period last year.

Meanwhile, in the first half of the year, the birds closed 354 retail outlets and 202 new retail outlets. The overall performance is still in the doldrums.

How much performance contribution can the AND1 exclusive trademark franchise bring to the company? In a notice, the company pointed out that due to the design and production cycle of products, it is not expected that the project will have an impact on the company's performance this year.

But starting next year, AND1 products will be launched online and generate revenue.

Indulge in capital operation

In order to cope with the weakness of the main business, before making the AND1's brand operation power income pocket, Guai bird has also made many attempts, the most important thing is to frequent the capital market.

Following last year's investment in sports marketing company tiger sports, in early June of this year, the Hubei bird announced that it would invest 383 million yuan in a part of the sports collection shop, which was part of the Jay's trip.

After the completion of the paction, the company will hold 50.01% of Jay's stake and become its controlling shareholder.

In July 25th, the noble bird announced that it would invest 100 million yuan to increase the capital of Shenzhen Xingyou technology and become the largest shareholder.

According to public information, star technology is an Internet sports game supplier.

This also means that in the field of sports games, you also have to set foot in the game.

However, the ambition of the noble bird is more than that.

In September 3rd, the precious bird invested 382 million 500 thousand yuan to acquire 51% of the Xiamen shoes brand owned by Xu Songmao, Huang progressive and Tang Xinye.

The expensive bird said the acquisition is to improve the company's channel layout.

But in the industry view, considering that many investment projects are in the initial stage of operation, and the investment return cycle in sports industry related fields is generally longer. From the current financial data, frequent investment has not yet brought strong returns to the birds.

Zhao Pei, a clothing industry expert, believes that games, insurance or tiger Internet sports focus on "Internet +" projects are not familiar to the birds and have quite a lot of experience.

In the operation of the main business, the birds have suffered.

Zhao Pei pointed out that in 2012, the precious birds suggested that 552 million yuan of IPO fund-raising of 882 million yuan should be used to build a "national strategic store".

But last year, the company said that the company has changed its national strategic store construction project into a permanent supplementary Liquidity Fund due to factors such as macroeconomic and industry environment, business environment change and company's strategic pformation.

AND1 stay down for examination

In view of this, the acquisition of AND1 in Greater China is only a small part of the capital operation.

But the specific operation of AND1 remains to be seen.

Because the weakening of brand power is the biggest problem for AND1.

It is reported that since 2005, AND1 has changed hands three times in six years, and has sold to three hosts of AmericanSportingGoods, BrownShoeCompany and GalaxyBrands.

As GalaxyBrands was acquired by SequentialBrandsGroup, the authorized dealer of the paction in June 2014, AND1 also joined the latter.

In mainland China, AND1 has almost disappeared for many years.

From the current sales situation of online channels, the peak period of AND1 has long passed.

After entering the AND1 brand website, reporters found that the products sold mainly consist of basketball shoes with very limited style.

In Jingdong and other electronic business platforms, the price of basketball shoes of different styles at 200-1500 yuan and Nike, Adidas and other brands of basketball shoes are basically the same, but there is not much sales.

The average monthly sales volume of a single shop is zero.

The company also said that the company has been engaged in R & D, production and sales of the brand.

Although AND1's business is similar to that of the current company, the company has some experience in successfully running the sports brand in China. Meanwhile, Chinese senior basketball fans also have a certain brand recognition for AND1. However, AND1 is a brand new to the "noble bird". The company also lacks experience in running international brands, and there is still uncertainty about its successful operation.

"The shrinking of the main business is forcing the birds to find more market space."

Zhao Pei believes that investing in Jay's trip and famous shoe store is the key to "save yourself". Although the surface is the expansion of channels, the actual business is upgrading.