BELLE Split Sports Plate Listing Performance Seen Nike ADI

A few days ago, BELLE International's sports business track International Holdings Limited (called "Tao Bo sports") passed the hearing of the HKEx listing and subsequently updated the prospectus. According to the corresponding public information, the joint sponsor of the IPO is Bank of America and Morgan Stanley.
In July 2017, BELLE completed the privatization of the HKEx with the aura of "one generation of shoe king". Since then, discussions on the decline of former shoe giants have become the focus of social media. Now, two years later, BELLE will enter the capital market in another way.
At present, the days of footwear brands are not so good. Before the loss of Daphne, there was a failure to rebuild the company. In contrast, many shoes and clothing people believe that the sports field is ushering in second gold ten years. Against this background, the listing of Tao Bo sports has attracted considerable attention.
"Our directors believe that we are ready to get ready to re-enter the capital market in the stock exchange, which will benefit our business development strategy and will benefit us and our shareholders as a whole." This is what pointed out.
Cheng Weixiong, general manager of Shanghai Liang Qi Brand Management Co., Ltd., told reporters that BELLE owns three major businesses: footwear, sports and clothing. Among them, the footwear business is adjusting the transition period, the apparel business is in the initial stage of development, and the sports business is developing at a high speed. "According to different stages of business development, choose different ways, for Tao Bo, now is a good time to market."
　　 Market share 15.9%
Revenue depends on two brands
In fact, in June of this year, it was officially submitted to the HKEx for the application for stock exchange. Prior to that, there were not many public reports about Tao Bo movement.
The information of the sports network shows that since the 90s of last century, it began to get involved in sports products. Since 2000, it has been trying to start a new channel, enriching the brand portfolio. In 2010, it has expanded to outdoor and sports fashion categories, and gradually explored and developed the multi brand brand store business mode. In 2018, it also bought FOSS brand.
According to the information disclosed by the company, as of February 28, 2019, there were 8343 direct store stores, of which 98.8% were single brand stores. In addition to a single store, it also operates brand stores through its own store brands such as "TopSports" and "Foss".
In order to further expand its business scope, it is also using downstream retailers to distribute its brand partners' sports shoes and clothing products. It is reported that as of the end of February 2019, it has 1080 downstream retailers and operates 1880 entities in various parts of China. In addition, it also runs its own online store on several Chinese online retail platforms as a supplement to the physical retail network.
On the whole, the operation of Tao Bo sports is quite bright. According to the data, in the 2016-2018 fiscal year, the total score of the talpaca campaign was 21 billion 690 million yuan, 26 billion 550 million yuan and 32 billion 560 million yuan respectively, and the annual profits were 1 billion 317 million yuan, 1 billion 436 million yuan and 2 billion 199 million yuan respectively.
At present, Tao Po sports has become the sports retail and service platform of BELLE international. Its agency brand covers Nike, Adidas, PUMA, Converse and so on. It has 17 international sports or outdoor brand distribution rights. According to data from Sullivan, estimated by the estimated total retail sales in 2018, Tao Po sports is China's largest sports shoe clothing retailer with a market share of 15.9%.
On the whole, the industry is quite optimistic about the listing of Tao Bo sports. "From the gross margin, the market is stable at around 41%, and the gross profit margin of Baosheng international in 2017, 2018 and 2019 is 35.01%, 33.51% and 34.52% respectively. From the inventory turnover rate, it is far below the average level of the industry, reflecting the efficient management of goods." Cheng Weixiong pointed out this.
However, the "International Financial Daily" reporter noted that despite the large number of proxy brands, the sales revenue of Tao Po sports still depends mainly on the two brands of Nike and Adidas. In the 2016-2018 fiscal year, the sales of the two brands accounted for 90%, 89.4% and 87.4% of the company's total sales respectively; in the first quarter of 2019, the proportion was 88.8%.
Tao Bo movement itself is aware of this problem. "We rely heavily on the marketing capabilities of our brand partners. Any negative marketing activity may have an adverse effect on our business performance. " It also said competition in China's sports shoes and apparel retail industry will intensify. Because the retail agreement between the company and its brand partner is not exclusive, it will face competition from the current market or other sales channel retailers.
A long-term concern of the apparel industry investment pointed out that Tao Bo sports is the largest sports shoe clothing retailer and service platform in the country. In the face of such a huge Chinese market, it will still be the first choice for international sports brand cooperation. Compared with other international brands, Nike and Adidas are still the two most popular brands in the Chinese market. Based on consumers' willingness to consume, Nike and Adidas account for a large proportion from the perspective of business income.
Zhang Qing, founder and President of Beijing key road sports consulting company, told reporters that Nike and Adidas's operation changes will always affect the operation of Tao Bo sports. "In the short term, international brands will continue to develop. After the listing of Tao Bo sports, with a bigger financing platform, there will be more attempts in the future.
　　 Investors benefit
The return of "shoe king" BELLE
With the listing of Tao Bo sports, the investors behind it and the BELLE group that they belong to are also standing next to the "glare".
In fact, as early as May 2018, Bloomberg quoted information sources as saying that Gao Ling capital and CDH investment consider splitting BELLE's sports business and going to Hong Kong alone. Why are these two investment companies? There is another story behind it.
At the end of April 2017, BELLE issued a notice announcing that the consortium, which was composed of high leverage capital group, CDH investment and BELLE international executive director, proposed a privatization offer with a total purchase price of HK $53 billion 100 million. At that time, the chairman and chairman of BELLE International's two founding chairman, Deng Yiu and chief executive Sheng Bai Jiao, did not take part in the privatization. They would sell all the shares of BELLE, and this move was also interpreted as "cash out".
BELLE CEO and executive director Sheng Bai Chai said at a performance meeting that privatization is to "find a way out" for the company. Now the company is in urgent need of transformation. It needs to seize the "time window" and needs new resources and talents.
At present, BELLE's "proud" women's shoes industry is still in a doldrums. Take Daphne as an example. In 2018 alone, it closed 1016 sales outlets. In terms of conversion, it closed nearly 2.8 stores a day.
The situation in sports is different. After many years of recovery, the local sports industry with policy support is ushering in another stage of development. The research report from Anxin securities shows that in 2018, the total retail sales of China's sports shoes and clothing retail market reached 235 billion 700 million yuan, and the compound annual growth rate of four years was 12.8%, which is expected to reach 392 billion 300 million yuan in 2023.
Cheng Weixiong also told the "International Financial Daily" reporter that before BELLE privatization, Tao Po, as the sports business department of BELLE group, had a better development and the proportion of sports sales increased year by year. The business of Tao Bo is at a different stage of development with other businesses of BELLE, adopting different business models. After nearly two years of development, Tao Bo has already achieved initial success in the transformation of science and technology and digitalization. The overall business situation is better than privatization, and the overall development is more mature and steady. At present, the listing will further enhance the company's status and attract more talents, business partners and strategic investors. It can be said that the current listing is not only a need for business development, but also a favorable opportunity for the market. "
Zhang Lei, a highly named capital partner, once said after privatization of BELLE international that what the outside world may see is BELLE's current problems. But from the perspective of high leverage, BELLE has many treasures. With the subsequent landing of the capital market, the high alarms and other investors will undoubtedly become one of the beneficiaries.
Zhang Qingxiang, an international financial daily, pointed out that investors are profit driven and their capital costs. "This investor is taking the two step step by step, stripping the lack of market imagination, and then making a new combination to achieve capital appreciation and exit in the future. It does not need to be dragged on by other things. In the past, when BELLE went public, it wanted to make the plates bigger. Now it is the specialty of technology, which is also the trend of the future.