Anta Will Be The Most Potential Buyer Of Puma.

German sports brand

Standing at the crossroads.

With Anta's market capitalization running to 100 billion, the industry has speculated that it will be the most potential buyer of Puma.

According to the world clothing and shoe net, last week, Kai Yun group announced that it has allocated 70% of its Puma shares to shareholders, of which Art MIS will become a long-term strategic shareholder holding Puma 29% shares.

Art e MIS holds a stake in 40.9% of Kai Yun group, while Kai Yun group will continue to hold 16% of Puma, and about 55% of the shares will circulate in the capital market.

Some analysts said that with the Puma stock in

The further increase in free circulation may attract more investors.

It is reported that Kai Yun group has hired Rothschild and d'Angelin&Co as consultants to divestiture Puma related matters, while Puma is collaborating with JP Morgan.

In response to the decision of the group to split shares, Puma CEO Bj RN Gulden responded on Friday that the group is still indirectly holding 45% of the brand, so it will not affect the development strategy of Puma at this stage.

He also added that as Puma's free circulation shares in the market become larger, it means that brands can make decisions more quickly.

In fact, since last April, there was news that Fran ois-Henri Pinault, CEO of Kai Yun group, started to streamline the structure of Puma's board of directors.

In 2007, Kai Yun group bought a controlling stake of Puma 86% with the US retail group Redcats USA for 5 billion 300 million pounds, but Puma did not show the group's expected competitiveness, and the gap with Adidas, Nike and other competitors was bigger and bigger. Even in the strongest brand soccer field, its products were also seen as a substitute for Adidas and Nike two brands.

It was not until the end of 2014 that the brand announced its performance with the popular singer Rihanna, but its performance began to improve. However, Kai Yun group has already identified it as a non strategic asset and focused on luxury business. Some analysts say the reason behind this is that Puma's profitability is disappointing.

In 2015, Puma, whose outstanding performance, was reported to be sold several times, the market value of Puma was about 2 billion 100 million euros, and Anta's market value was about 47 billion Hong Kong dollars.

2 years later, the market value of Puma was 4 billion 800 million euros, while Anta's market value was HK $102 billion, which was 2.2 times that of Puma. Since 2017, Anta's stock price has increased by 70%.

For the current market value of about 5 billion euro Puma, the industry believes that private equity funds and sports brands will not be easy to launch, while Nike and Adidas two industry giants also disdain acquisitions. It is too expensive for Under Armour or New Balance to quit the second tier sports brands.

Therefore, the most likely is Anta.

According to statistics, in the first half of fiscal year 2017, Anta's net cash was as high as 10 billion yuan, and only about 20 billion yuan to become a major shareholder of Puma.

After the 2008 Beijing Olympic Games, Anta realized that the Chinese sports industry will have a new turning point. Too single brand structure or market will be eliminated quickly, and the multi brand strategy will be launched in 2009.

Subsequently, Anta bought the franchise and trademark rights of FILA from BELLE international in the price of HK $600 million, and was responsible for the promotion and distribution of FILA products in mainland China, Hongkong and Macao.

In order to attract young consumers, FILA has also entered the trend of the world in recent years, invited the celebrities to endorse celebrities. Before that, FILA also launched a joint venture with Gosha Rubchinskiy, and invited Jason Wu to continue to launch joint design.

Last year, the brand announced that Chen Kun was the spokesman for the brand.

Some analysts believe that FILA has now become a new engine of Anta group's performance.

Yao Weixiong, President of FILA Greater China, revealed in an interview that FILA's future goal is to enter 10 billion clubs in three years and upgrade from sports Nouveau to top three brands in the domestic high-end market.

In the past 5 years, FILA's retail growth has been maintained at around 40%.

As of June 30th last year, Anta had 9041 stores in China and 869 FILA stores.

UBS issued a report that the market still underestimated the long-term growth potential of Anta group's FILA business, and believed that FILA business had a good business layout. It is expected that the related business will have a compound growth rate of over 30% from 2017 to 2020.

Thanks to the outbreak of FILA's performance, Anta group's net profit rose 29% in the first half of last year.

Some analysts expect that Anta group's operating income in 2017, 2018 and 2019 will reach 16 billion 168 million yuan, 20 billion 110 million yuan and 24 billion 279 million yuan respectively, and the net profit attributable to the parent company will reach 3 billion 115 million yuan, 3 billion 864 million yuan and 4 billion 832 million yuan respectively.

Anta will announce its 2017 annual performance report in February 27th.

In the third quarter of last year, the retail sales of Anta brand registered a double-digit increase year by year, while non Anta brands increased by 60 to 70% annually, up from 40 to 50% in the first half of the year.

After tasting the sweetness of acquiring FILA, analysts believe that this time or the best time for Anta to get Puma revenue.

In August last year, Ding Shizhong, chief executive of Anta, responded specifically to the rumors of the acquisition of Puma when he held the interim results briefing. He said that although he did not know where the news came from, he acknowledged that the group was actively looking for new opportunities to meet the development of Anta.

Like FILA, Puma began to accelerate its growth after betting fashion. As Rihanna and its contracts are about to expire, Puma has signed a contract with Kardashian family members Kylie Jenner, hip-hop singer The Weeknd and Instagram 130 million, a 90 year old singer Selena Gomez.

In order to attract more young Chinese consumers, Puma also signed a endorsement contract with Liu Wen, Yang Yang, Liu Haoran, Zhang Yuqi and other supermodels and popular stars.

Under the influence of Rihanna and other stars, the Fenty by Puma series has become a must for fashion people.

However, some people think that Puma, which starts with sports equipment, has to rely on fashion elements to get rid of the dilemma.

In order to regain the professional image of brand in the eyes of consumers, Puma began to lay emphasis on the sports market.

After receiving high attention from Jamaica flying Boulter in the field of running, Puma has become a AC sponsor in Milan.

With the arsenal, Dortmund and Italy national teams, Puma almost caps international mainstream sports resources.

In addition to sponsoring sports teams and events, Puma opened a 3 day running experience shop in Shanghai last June 29th, and invited China's supermodel Liu Wen to come to help. It is hoped that consumers will realize that in addition to Rihanna's fashion series, Puma is the main business of Puma.

In the three months ended September 30, 2017, Puma sales surged 17% to 1 billion 122 million euros, and net profit surged 57% to 62 million 100 thousand euros, but its net profit margin was only 5.5%, far below the luxury brands such as Gucci and Saint Laurent of Kai Yun group.

In recent years, Anta has been trying to enrich its brand matrix by constantly acquiring foreign brands, so as to accelerate its entry into the international market.

In addition to FILA, Anta also won the British brand Sprandi and Japanese brand Descente in 2015 and 2016 respectively, and bought Korean brand Kolon Sport and children's brand KingKow last year.

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Up to now, Anta's brands including FILA, FILA Kids, Descente, KOLON, Sprandi, NBA brand and other international brands, plus its own ANTA and ANTA Kids, have completed the brand matrix layout of the domestic high and low price and different price target markets. It is the only clothing retailing group that can cover many brands and channels in China.

In fact, Anta's ambition is not just as simple as a multi brand group. Its real goal is to become a clothing retail giant with an annual revenue of 100 billion yuan.

To achieve this goal, the premise is that Anta must establish a global layout and further open the international market.

According to Li Ling, vice president of Anta, earlier told the media, Anta's multi brands are independent operation, each brand positioning and consumer groups are different. In 2018 Anta will focus on three directions: specialization, high quality and internationalization.

In this regard, some analysts believe that the development trajectory of FILA and Puma is similar, if Anta is willing to launch, the two will produce synergy.

According to the existing brand matrix of Anta, although it has basically covered the needs of consumers in all walks of life in China, and at the same time, it has the characteristics of professionalism, high quality and fashion, but lacks the mature global sports resources and operation experience.

At the same time, Puma, which is globalized, famous and fashionable, lacks the opportunities and resources that are closer to Chinese consumers. Cooperation with Anta will help stimulate Puma's performance to accelerate recovery.

From this perspective, if the two sides can conclude a paction, it will be a win-win business.

It is noteworthy that, in addition to Anta, its rival Lining has become the industry's latest speculation of potential buyers of Puma.

Unlike Anta's acquisition based approach, Lining's multi brand strategy mainly relies on independent research and development, but it always ends in failure.

Some people in the industry believe that the acquisition of Puma may be a competitive weapon for Lining to match Anta.

However, Lining's market value at present is only about HK $14 billion, which is 1/8 of Anta's 102 billion market capitalization, and its capital will be the biggest resistance to Anta's acquisition.

Up to now, Anta still does not plan to show its cards early. Ding Shizhong has said in an interview that the goal of mergers and acquisitions must conform to the group brand strategy. Regardless of the size of the group, if the group's current capital and strength, if organic will not rule out, it will give the market a pleasant surprise.

In May last year, Anta allocated $3 billion 790 million for the acquisition and working capital, but so far the company has not announced any acquisition or cooperation with international sports brands. A signal that the industry has to pay attention to is that the group announced that the chief financial officer, Lin war, formally left office in January 1st this year.

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