FILA Became Anta'S Decision To Acquire Amamin'S Fuse

According to the world clothing and shoe net, despite the worries of the global retail market in 2018, the Chinese sporting goods industry seems to welcome spring, especially when it is about to swallow.

Sports

Sports are officially moving towards a new stage in terms of performance and layout.

According to the 2018 annual performance Bulletin released by Anta sports, the Group sales increased by 44.4% to 24 billion 100 million yuan in the year ended December 31, 2018, the net profit increased 32.9% to 4 billion 103 million yuan, the gross profit margin increased 3.2 percentage points to 52.6%, and the operating profit increased 42.9% to 5 billion 700 million yuan.

As a result of increased sales and distribution costs, the operating profit margin dropped by 0.2 percentage points to 23.7%.

With the strategy of "single focus, multi brand and all channels", the group handed over the best report card in 11 years last year, and the revenue, operating profit and profit attributable to shareholders reached a record high, and maintained double-digit growth for five consecutive years.

Sales of footwear increased by 22.5% to 8 billion 600 million yuan by category, and clothing sales were particularly strong, up 61.4% to 147 billion yuan, representing 61% of total revenue, while accessories sales increased 43.9% to 760 million yuan over the same period last year.

Anta CFO Lai Shixian said that the substantial growth of the group's performance mainly benefited from the steady growth of Anta's main brand and the rapid growth of other brands including FILA, of which Descente was growing at 200% because of its low base.

In addition to the additional effects of its acquisition brand, Anta sports's high growth on high base benefits from the cooperation of channels, and new retail became the key word in 2018.

According to the world clothing and shoe net, as of the end of 2018, there were 12188 stores in the Anta group, accounting for more than 30% of the shopping malls, and 40% of the second tier cities.

Including Anta children's independent shop Anta main brand has 10057 stores, FILA has 1652 stores in Asia, Descente has 117 stores in China, Kolon Sport has 181 stores in China, KingKow has 77 stores in Greater China and the United States, Sprandi has 104 stores in China.

As early as the end of 2017, Anta and Tmall launched a smart store project cooperation. According to the world's network operators, in the Guangdong region alone, the group has accumulated nearly 500 smart stores within one year, recruiting nearly one million brand members.

According to the world clothing and shoe net, in 2019, Anta group plans to further increase the number of physical stores, including Anta children's Anta brand stores, which are expected to reach 10100 to 10200 stores, and FILA stores are expected to reach 1800 to 1900 stores.

The group's emphasis on offline stores is not expanding, but optimizing the store mix and improving efficiency.

In addition, Anta will also guide the product design and retail terminal plan through strengthening cooperation with Ali through big data.

By 2020, the Group expects total sales to grow by double-digit growth.

FILA Kids and FILA Fusion are expected to achieve an increase of more than 30%.

Anta also performed well on the Internet. During the double eleven period in 2018, Anta's online store in Tmall reached 1 billion 130 million yuan a day, 67% higher than that in 2017, and entered the list of 2018 new product driven brand TOP100 released by Tmall.

Founded in 1991, Anta group has become the largest comprehensive sporting goods Brand Company in China after 20 years of development.

In 2018, Anta's market value exceeded 100 billion to HK $100 billion 537 million, which is 5 times the market value of Lining.

After the acquisition of yamamin sports, Anta will also become the third largest sports giant in the world after Nike and Adidas, against Under Armour.

According to the world clothing shoes and hat net, after the 2008 Beijing Olympic Games, Anta realized that the Chinese sports industry will have a new turning point. Too single brand structure will be quickly eliminated by the market. Since 2009, it has begun to implement the multi brand operation strategy, and has acquired the famous Italy advanced sports leisure brand FILA, the old brand city walking shoes brand Sprandi, the Japanese functional clothing brand Descente, and the Korean outdoor brand Kolon Sport.

Among them, the acquisition of FILA proved to be one of Anta's most successful strategic initiatives. Last year's annual growth rate reached more than 80%. It has become the largest growth engine for group performance, and the first fashion week in Milan in 2018. Its 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.

Group executive director and Anta brand President Zheng Jie even said that without the acquisition of FILA, Anta could hardly make the decision to acquire amamin sports.

According to the announcement issued by Anta on Monday, the investor group, which is composed of Fang Yuan capital, Anamered Investment and Tencent, acquired the 4 billion 660 million Investment of the outdoor sports brand Ebon Finn sports Amer Sports offer. The offer has been approved by the federal economic competition committee of the Federation of Hong Kong. At present, the acquisition plan only needs to wait for the tender offer to exceed the shares of the amawin sports issue and the voting rights can be completed by 90%.

The acquisition of the top brands in the industry by domestic companies is one of the most attractive acquisitions in China in 2018. Ding Shizhong, executive director of Anta group, has also said that this is the "most important decision" he made in his 27 years of entrepreneurship.

It is reported that in order to complete the acquisition, Anta and Fangyuan capital are ready to borrow 4 billion 215 million euros from the bank.

Ding Shizhong said earlier that the brand value of amamin sports is difficult to measure with money, rather than relying on money in the short term. The group looks at the growth space of the company's brand in the Chinese market.

Zheng Jie also said that the biggest role of the acquisition is to let Anta go further on the multi brand road. No matter how many brands it purchases, the positioning of Anta's main brand will not change.

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It is noteworthy that the industry has earlier speculated that Anta is the most potential buyer of the German sports brand Puma.

Similar to FILA, Puma has invited female star Rihanna to become the creative director of women's clothing since 2014, and its products have been greatly improved in fashion and brand performance.

In the past ten years, Anta group has been able to fill the gaps in these markets by acquiring brands for different positioning and market segments. On the other hand, it absorbs the experience and professional and outdoor brand technology of mature brands, and initially forms three brand segments of the mass subspecialty sports, high-end fashion sports and professional outdoor sports.

At present, most of the brands purchased by Anta group are located in the high-end consumer market. The main brand Anta expands mainly in the three or four line cities, FILA is facing the first tier and second tier cities, and Descente is positioned more high-end.

For the next acquisition plan, Ding Shizhong said through the financial statement that Anta sports single focus, multi brand, full channel operation mode and value retail with "consumer as the core" let the group successfully penetrate into different market segments and distribution networks, and help to gain more market share.

With its increasingly rich brand portfolio, Anta will build several sharing incubators, including supply chain, e-commerce, logistics and finance, so that each brand can be pformed from independent operation to mutual cooperation to achieve synergy and promote brand mutual benefit.

In addition, Anta is actively seeking marketing activities through sponsorship, celebrity effects and other methods.

In 2017, Anta signed NBA stars, including Thompson, Garnett, Rondo, Parsons, Scola and so on, all of which were famous at home and abroad.

In 2018, Anta sponsored 24 Chinese national teams and worked with the official of the Chinese Olympic Committee to become the costumes sponsorship brand of the 2018 Pingchang Olympic Winter Games and the 2022 Beijing Winter Olympic Games and the winter Paralympic Games.

FILA regional brand FILA Fusion also invited 90 star Wang Yuan as spokesperson to attract more young consumers.

This also caused Anta's advertising and publicity expenditure ratio to rise from 10.6% in 2017 to 12.1% in 2018.

At present, China's sports are in the best period of development.

The national development and Reform Commission and the General Administration of sports issued a notice that the total target of sports consumption reached RMB 1 trillion and 500 billion yuan in 2020. The State Council also issued a notice on accelerating the development of sports industry to promote sports consumption. It is estimated that the scale of China's sports industry is expected to reach RMB 5 trillion yuan by 2025.

Nevertheless, some Chinese sporting goods brands still face challenges such as blurred brand image and lack of diversity of products. Zheng Jie, earlier in an interview with Xinhua news agency, also pointed out that China's sports industry still has great room for development. Now it has not yet reached the stage of "outbreak", and the key issues such as the management mode, management mode, input and output of the industry, and how to make the sports industry develop stably and healthily are still at the exploratory stage.

With the good momentum of development of China's sports industry, it is not just Anta, but Lining, a competitor founded in the same period, has developed from another road in this environment. With the spread of Athleisure sports and leisure style, he began to seek pformation from the design style, and shifted the target consumer group to a more young post-90s. He boarded the fashion week of New York fashion week in autumn and winter to become the first domestic sports brand on the international stage, and the show of the same brand was sold out in one second, which triggered a heated discussion on social media in 2018.

After re appearing in New York fashion week in 2019, Lining's share price was once the highest closing price since July 2011, becoming Citibank's preferred stock in China's non essential consumer stocks.

According to the analysis, whether it is betting the product's fashion to cater to the millennial Lining, or aiming at China's demographic dividend and absorbing overseas mature brands to widen the market segments of Anta, we need to find an ingenious balance between sports and fashion.

In the final analysis, how to form an effective dialogue with young consumers is the core of brand growth.

According to Tianfeng securities data, in 2018, China's sports user market had only 28.6% share of local brands, while foreign brands had a 54.3% share. For Anta, a sporting goods giant in China, it has a long way to catch up with brands like Nike and Adidas.

Shares of Anta group (02020.HK) rose 3.18% to HK $45.4 today after the earnings announcement, which has risen 30% since the beginning of this year, with a current market value of HK $121 billion 800 million.

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