The Kappa Pain Behind Phenix'S Entry Into China

In June 19th, China made clear for the first time in its report that it is actively developing Phenix brand Business development in China and overseas sales based on European market. Phenix is China's top international skiing brand which was acquired in 2008. It has been developing for some time in the Japanese market. In the eyes of the industry, the Chinese plan to introduce Phenix to China is partly due to the gradual rise of China's "ice and snow market". On the other hand, because of the revival of Kappa under China's trend, new growth engines are urgently needed to drive development. China expects Phenix to become a new growth point, which is not easy to achieve in the short term and full of challenges. At the same time, this multi brand strategy is not only the only way for China's trend, but also some choices.

"Deploy troops" to enter the Chinese market

In June 19th, Kappa parent company China released the 2018/2019 annual report. In addition to the disclosure of earnings data, China made clear for the first time in its report that it is actively expanding the business development of Phenix brand in China and overseas sales based on the European market. In the 2017 earnings report, Chen Yihong, chairman of China trend board, said that the trend of China will also focus on "ice and snow" development opportunities and tap the white gold of the Winter Olympic Games.

In 2008, China moved to acquire Phenix brand. Previously, Phenix has been developing for some time in the Japanese market. Sun Jianjun, President of Japan's Phenix company and general manager of China Phenix, told the Beijing Commercial Daily reporter last year about the development of Phenix in the global market: "in the past three years, the overall growth rate of Phenix brand in the Japanese market has been over 30%. In 2018, though it was hit by an earthquake, the growth rate of Phenix still exceeded 20% over the same period. As far as outdoor sporting goods are concerned, Phenix market share continues to be the first in the Japanese ski apparel market segment. In the European market in Italy, Austria and Norway, Phenix has always been the top three in the high-end ski market. "

The outstanding performance of the "ice and snow market" abroad has made Phenix want to get a bigger slice of the Chinese market. "This is also an opportunity to see the rapid development of China's ice and snow industry and the Winter Olympics." China's trend is frankly stated in the announcement. In March 2019, the general office of the CPC Central Committee and the general office of the State Council issued the "opinions on vigorously developing ice and snow sports with the opportunity of the Winter Olympic Games in Beijing in 2022", pointing out that we should speed up the development of ice and snow fitness and leisure industry, promote the deep integration of ice and snow industry and related industries, and innovate the development of ice snow equipment manufacturing industry.

For China's "ice and snow cake", Sun Jianjun said last year that at present, Phenix has entered 22 stores and outdoor stores in China. It is expected that by the end of 2018, it will expand to 40, and Phenix will locate and choose more high-end shops. For professional outdoor channels, leading customers and market access will be selected. For example, 5 most influential stores will appear in Sanfo outdoor stores this year.

China will vigorously expand the Phenix market in China. Spin Cheng Weixiong, general manager of clothing management expert and Shanghai Liang Qi Brand Management Co., Ltd., said that China's trend is actually to use the "Winter Olympics" opportunity to boost its performance, but it is too late now. This also reflects the main brand Kappa of China's trend from another dimension. Its development has not yet recovered to the level of the previous brilliant period. China's trend needs new impetus to stimulate growth. For the relevant circumstances, the Beijing Commercial Daily reporter contacted China's trend for an interview, but as of press time, the other side did not reply.

Ups and downs run back

In addition to the trend of China, the introduction of Phenix into the Chinese market has attracted much attention. In the earnings report, the financial year of China has changed from December 31st to March 31st. Therefore, the 2018/2019 annual report of China's trend is from 15 months of March 31st January 1, 2018 to December 31st.

Data show that in the 15 months ended March 31, 2019, China's sales volume reached 2 billion 144 million yuan, an increase of 15.4% compared with the 15 month earnings figures in the same period last year, and the company's equity holders should earn 866 million yuan, down 27.2% compared to the same period last year.

Looking back on the trend of China's development in recent years, its performance has experienced ups and downs. In 2007, China was listed on the market. Kappa, after having capital, has opened up a road of rapid development. In 2008, China's revenue rose 94.17% to 3 billion 322 million yuan, and the profit attributable to shareholders also increased by 86.45% to 1 billion 368 million yuan over the same period. In 2010, China's trend reached its peak, operating income reached 4 billion 262 million yuan, and the profit attributable to shareholders reached 1 billion 464 million yuan.

However, in 2011, the number of Kappa stores was sharply reduced from around 4000 in 2010 to 1502 now, plus the backlog of backlogs and the gradual withdrawal of channels. The profits of Kappa have shrunk sharply. In one year alone, Kappa's revenue declined to 2 billion 742 million yuan, and the profit attributable to shareholders was only 102 million yuan.

As of March 31, 2019, the total number of group Kappa brands increased by 15 compared with the end of 2017, of which Kappa brand stores increased by 70, and Kappa children's stores decreased by 55. In the first quarter of 2019, the distribution network still covered all the major provincial capitals and other major cities and towns in China.

"Kappa"

For China's performance, fashion Yang Dayun, an industrial investor and excellent Italian CEO, said that the performance of China's main business in recent years is indeed not satisfactory. This is caused by many reasons: first, the peak growth period of the main pillar brand Kappa has passed; in addition, Kappa is the first Chinese brand to do "fashion movement", and it is also in music, Popular After the cooperation, brand development has reached its peak, just as it is today's FILA. However, a brand with such a high popularity has a flaw - its life cycle is short. When consumers start not to accept their big LOGO, crash colors, etc. Trend Kappa is bound to face a significant decline in the market. This has also prompted China's trend to find new growth points to cater to the market.

In fact, Kappa also noticed the problem mentioned by Yang Da Yun. In recent years, China's trend has been promoting the spanformation of Kappa and recovering the related rights and interests of Kappa from Lining. In 2017, the trend of China decided to focus on brand development, focused on mining channels, and launched the development strategy of "brand + product" and "brand + retail".

In mid 2018, when China released its performance report, it further pointed out that China's trend will be in three stages of brand operation in the second half of the year. The first thing we mentioned is "seize the right channel", followed by "vigorously reforming products, integrating into brand DNA", and third, "building long-term brand equity".

Cheng Weixiong suggested that although the trend of China has the development of capital to many brands, too much brand matrix will disperse the Chinese trend and revitalize the brilliant energy. Although Anta, Lining, XTEP and others all have many brand matrices, the premise is based on the steady development of the main brand. Today, Kappa has not yet been fully rejuvenated. It has cooperated with MIZUNO early and introduced Phenix to China. It has great challenges to China's trend of control and multi brand operation capability.