How Can Traditional Sports Retailers Survive In Crisis?

According to the world clothing shoes and hats net, the traditional sports retailers are facing a crisis. Recently, the biggest sport in America. clothing Foot Locker, one of the retailers, has experienced a share price in Waterloo after poor quarterly earnings. According to media reports, its same store sales fell 6%, high-end in the second quarter. footwear The sales decline of clothing category is even more disappointing.

The same store sales mean that the sales shop is open for at least one year. The sales volume of the same store in the same period is usually compared with the annual sales in the month and quarter. According to CitiResearch, the decline in same store sales marks the first time that Foot Locker has been in the doldrums since the fourth quarter of fiscal 2009. Company management believes that part of the decline is the rapid change in consumer tastes and the lack of product innovation capabilities of suppliers.

"We are obviously disappointed with the results of this quarter. Our team is rapidly adjusting its business model to adapt to the changing retail market. We see that in this market, consumers' interests and trends are faster than ever before. Richard Johnson, chief executive of the company, said in a statement, Richard Johnson.

As more and more consumers fight Amazon As for e-commerce channels, the days of traditional physical retailers are becoming more and more difficult. After shrinking quarterly earnings, Foot Locker's share price fell by 26.1%. Johannsen told analysts that the latest chaos in the sportswear retailing industry was "the worst I've seen in twenty-five years".

Other sports retailers are struggling to survive. Dick's Dick s Sporting Goods was also underperforming, and its same store sales rose 0.1% in the second quarter compared to the same period last year. Other retailers in the industry, Hilbert sports (Hibbett Sports), Finish Line and Big 5 sporting goods (Big 5 Sporting Goods) share prices fell 18.3%, 12.5% and 3.3% respectively. Affected by the sports retail industry, Nike, Adidas and Andemar also showed signs of weakness in previous transactions.

Edward Stack, chief executive of Dick sports, expressed regret for the slump in the retail industry. The sports retailer in Pittsburgh reduced its annual financial guidance. More retailers and suppliers are relying on sales promotion to attract consumers. According to Stark, the price of products has become "unpredictable, sometimes irrational", resulting in a decline in sales.

Last June, Nike, the main supplier, announced that Foot Locker had begun selling products on Amazon. For Amazon's threat to its business, Johannsen showed a slight understatement. He believes that Foot Locker's high-end footwear products to boost sales will not be sold in Amazon channel.

"We believe that the direct sale of goods directly to Amazon will not pose an immediate threat," Johannsen said. "There is no indication that any supplier wants to sell the high-end sports products and sports shoes more than $100 directly through the Internet distribution channels."

Although Foot Locker is still catching up with the entity store business, Johannsen also acknowledges that they are moving to the pace of digital retailing as soon as possible, while speeding up the product development cycle with suppliers. The company's management says that by the end of this year, they plan to close 135 stores, which is higher than the 100 previously closed stores. The company also predicts that their same store sales will continue to decline, and the next two quarters are expected to slip between three and four percentage points.

"Sportswear and footwear sales are too large and there is too much inventory in retail channels," said John Zolidis, President of research Quo Vadis capital. "We believe that the state of reduction will continue for several years, and the supply will be reduced to a new level to meet lower demand." John Zolidis said.

According to the analysis of Credit Suisse, the decline of sports retailers' performance stems from the "seven sins": too high price; too much reliance on brand dealers; excessive retail inventories; no development of all channels; investment in electricity providers is harmful to traditional retail mode; retailer cost structure is too high; lack of independent brands and user loyalty.

In recent years, the collapse of large sports retailers is not new. For example, Sports Authority, Performance Sports, Gander Mountain and MC Sports have declared bankruptcy.

Take MC Sports as an example, the sporting goods distributor established in 1946 declared bankruptcy in February this year. When assets were liquidated, $62 million of the company's $78 million assets were in stock. In March of last year, Sports Authority announced that the collapse was also partly due to backlog of inventories. In order to clean up inventory, many retailers have to cut prices, so that young groups began to label these brands cheap. Although Sports Authority has also set up an electricity supplier department, and hopes to save its traditional retail chain by huge investment, it can not help but accelerate its bankruptcy because of its late start and high operating costs.

The decline in demand for basketball shoes, the sharp drop in the consumption of sports shoes and the recession in the return season have all led investors to worry about the future of sports retailing. According to the data of Cowen, the apparel industry has been declining in the past three months, and the rate of decline in July has reached 4.6%, while the passenger volume in January 2017 to July has dropped by 4.1%.

"The question in front of Sportsman's Warehouse and Hilbert sports is very simple: are consumers willing to drive 30 minutes to a physical store, or at home, especially in the case of freight free?" said Nathan Yates, director of research at Forward View Consulting (Nathan Yates), the US Investment Research Institute (Warehouse).

In order to alleviate the downward trend, sports retailers often sign exclusive agreements with suppliers such as Nike and Adi, and attract the young consumers to stop by the latest and limited edition products. However, a huge sports retailer can not rely on individual explosions to save it. What they should pay more attention to is how to catch the attention of the target group for the first time by reducing inventory, cleaning up inventory, independent innovation and multi-channel marketing.

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