Swallow "Weak" Amamin Sports And Inventory Turnover Slow Down, How Does Anta Break?

There are two sports brands that come out of Jinjiang in the past two years. They are often seen in people's eyes. One is Lining, who is stepping up in New York fashion week and Paris fashion week, and the other is Anta, whose market value exceeds 100 billion Hong Kong dollars in 2017, and its momentum is developing rapidly.

From the sports brand of Jinjiang, Fujian, Anta is breaking through the tight encirclement of competition, and has rushed out of the world to become the world's third largest sports brand.

Recently, the British brand assessment agency Brand Finance released the "2019 China's most valuable 500 brand" list, Anta entered the top 100, and entered the top 100 list as the only clothing brand.

Perhaps with the help of the golden age of China's sports industry, Anta has developed very rapidly in recent years. It has achieved high performance in the excellent performance of capital operation and brand, and has also earned the public's attention.

In becoming China's most valuable brand, Anta is also facing the challenge of slow inventory turnover and declining operating margins.

Stock turnover days rising with high performance

Anta's annual earnings report showed that its operating income reached 24 billion 100 million yuan in 2018, an increase of 44.4% over the same period last year, and net profit of 4 billion 100 million yuan, an increase of 32.9% over the same period last year.

Anta's performance in 2018 has reached a double-digit growth rate for the 5 consecutive year and has set the best performance data of Anta group.

But looking at the earnings report, Anta's operating profit increased by 42.9% to 5 billion 700 million yuan, but its operating interest rate declined, from 23.9% last year to 23.7% this year, even if it was 0.2%.

According to industry analysis, Anta's operating interest rate dropped significantly because Anta's advertising and publicity expenses rose, and its data increased from 10.6% in 2017 to 12.1%.

In fact, these are traceable.

In order to help the development of children's wear business, in March, Anta announced that Zhang Yuexuan, the famous child star, became the spokesperson for Anta children. In May, Anta joined hands with the spokesman for the player, Claire Thompson, to launch the "mad" series of publicity and the activities of the Anta public welfare ambassador; in October, Anta signed the famous NBA star Gordon Hayward as spokesperson; in addition, she also sponsored the Spartan warriors and appeared in the major world events.

Many advertisements and publicity have increased the cost of Anta, resulting in a certain decline in operating interest rate.

It is worth noting that Anta also has inventory problems, and the number of days of inventory turnover is also rising.

According to data, Anta stock turnover days increased from 57 days in 2014 to about 80 days in 2018, and the five consecutive years showed an upward trend.

The increase in inventory turnover may be related to the growth of Anta's direct sales in recent years. The increase in direct sales will slow the market development to a certain extent, which will lead to an increase in inventories and greatly increase the paction costs of enterprises.

Lining also encountered the same problem. In 2009, Lining opened the strategy of international expansion and began to open a large number of stores. But in 2011, he experienced a rebound effect. The number of storefronts also contributed to the serious backlog of inventory. Finally, Lining could only make a lot of layoffs to ease costs, and in 2012, the position of the largest sports brand in China was replaced by Anta.

The international sports brand FILA, which was acquired by Anta, ushered in the outbreak in 2018 and became the main driving force for the group's growth. It also provided confidence and experience for the group's internationalization.

Many domestic brands have followed suit by Anta to expand their internationalization through acquiring overseas brands.

In 2016, you acted as the trademark of the US sports brand AND1 in China. The company set up a joint venture with One Way Sport of Finland company to sell One Way products in China. Lining holds three international brand management rights, namely Italy sports brand Lotto (Le Tu), French outdoor brand Aigle (Ai Gao) and American dance and yoga wear brand Danskin.

The precious birds, 360 degrees, and Lining have the right to sell the international brand, but the effect is very small for the enterprises.

At the same time, don't forget, Anta acquired FILA after 10 years of training and precipitation.

With the experience of acquiring FILA, Anta announced in December 2018 that it will form an investor consortium with the joint venture fund of Chinese private equity, founder of Chip Athletica and founder of Tencent Athletica, and acquire all the issued and out of stock shares of amamin sports, with a total paction price of 4 billion 600 million euros.

The news has attracted the attention of people from all walks of life, and is known as the largest overseas paction in China's apparel industry.

In early April of this year, Anta announced that the acquisition of the amamin sports program was completed and the two sides will soon enter the payment process.

It may be a leap forward decision for Anta to finish the acquisition of amamin sports, which helps Anta to reduce its dependence on the Chinese market and further expand its international market.

But there are also skeptical views about whether the acquisition of amamin sports can help Anta get into the explosion of its performance.

This is that amamfin sports performance is in a "weak period". In 2018, amamin achieved 2 billion 678 million euros (about 20 billion 291 million yuan) in revenue in the first half of the year, with a profit of 231 million euros (about 1 billion 750 million yuan), and only 4% growth in global sales.

According to insiders, Anta's huge acquisition of amamin sports has not improved the performance of the group in recent years, and may drag Anta's "hind legs".

Although Anta's acquisition of FILA has brought enough successful experience, it can not be completely applied to the amamin sports. After all, it is necessary to teach students in accordance with their aptitude.

So Anta's future operation on amamin sports is not necessarily very successful.

If this is going to affect Anta's future development, it will create a dilemma for Anta's "small target" in 2025.

At the same time, insiders pointed out that if Anta acquired amamin sports to make it into a development dilemma, it would drag on the 10 year plan that Ding Shizhong had set before.

In fact, whether it is the increase in inventory turnover days or the acquisition of AMF sports to achieve internationalization, there is a certain risk to the development of Anta group.

If the inventory is too high, it is easy to form an imbalance between demand and supply, thus increasing the production cost of enterprises and bringing some pressure to enterprises. How to maintain the balance of inventory turnover days in time in Anta is an urgent problem.

In addition, overseas mergers and acquisitions can help enterprises to open the international market more quickly and conveniently, but there is a long cycle and high risk situation. The development of the brand itself will also have a certain binding force, which will have a great challenge to the development of Anta.

Under the pressure of rising inventory turnover and the decline in operating interest rate, can amaman sports help Anta quickly open up the international market and achieve a rapid leap in the future development?

It needs more market and time to give answers.