The "Peak Of Business" Of Domestic Sports Brands Has Become "Completely Annihilated".

Since the outbreak of the new crown pneumonia, many enterprises have resumed production since February 10th, but for the vast majority of retail enterprises, especially the domestic sports brands, their situation is still not optimistic. Such as Anta, Lining, XTEP and other major domestic sports brands in the last two weeks of trading in January 2020, their share prices dived, and the total market value evaporated over 30 billion yuan.

Generally speaking, many Chinese consumers like to wear new clothes for the new year. Because of this habit, many sports brands will launch a large number of special Chinese New Year holidays to hit the peak sales year before year, so the two week before the Lunar New Year is the selling season of the sports brand industry.

The manufacturers have stocked up to welcome the new year. No one could have imagined that what we met was a bad news, the spread and impact of the epidemic, and the performance of the international sports brand in the past years has also been greatly affected. As far as the current situation is concerned, the development of the epidemic is not yet clear enough. We can basically confirm that the peak season for the big brands will not arrive. Therefore, the most important business peak in the whole quarter was annihilated this year.

In addition, because most of the domestic sports brands rely on offline sales, the vacations caused by the epidemic are endless. The mall is closed and the streets are empty. It is a nightmare for the domestic sports brand. Without sales, there will be no cash flow, and wages should be paid as usual. The heavy cost of store rentals should also be borne.

The total number of offline stores opened by Lining in China is 7294, of which 2251 are directly operated by companies that need full cost of operation and the rest are dealer shops.

According to the financial report released by Lining in the mid 2019 (January to June), in the first half of 2019, Lining spent only 319 million yuan on store rentals, with a monthly average of 53 million yuan. In the same period, the total number of employees was 3495, and the wage cost was 725 million yuan, with a monthly average of 120 million yuan. Following the above data, Lining spent about 200 million yuan on average monthly rent and staff wages.

It can be imagined that no one will buy up, which will lead to the accumulation of stock. Inventory accumulation is very frightening for buyers. Because it leads to the interruption of cash flow. Although many owners, including Wanda, have confirmed that the rent will be reduced for a period of time, after all, such support will not last for months.

No one can predict that a sudden virus effect will make the "business peak" of the domestic sports brand "completely annihilated".