Sports Brand Collectives "Avalanche", Rely Heavily On The Domestic Brands Under The Line.

International sporting giants have lowered their growth expectations.

Adidas, a sporting goods producer, said Wednesday that the company's business in Greater China has dropped by about 85% from the previous year since the Spring Festival of January 25th. Due to the outbreak of the new crown virus, a large number of stores have been closed, and the number of outlets that continue to operate has also declined significantly.

As the world's largest sporting goods brand, Nike will inevitably be affected, after all, the contribution of Chinese business has a huge impact. On Tuesday, Nike's new CEOJohnDonahoe announced changes in the management of the company and appointed the new chief operating officer and chief financial officer. At the same time, HeidiO'Neill has also been promoted to the head of consumer business, which is one of the top leading positions of the company.

On the 17 th of this month, the media in Taiwan reported that affected by the epidemic, the Taiwan shoe factory has been stuck in raw materials because of the delay in the resumption of work. The production of Nike and Adidas is likely to break down. The original supply chain of the two big shoe factories behind the original supply chain, such as Baocheng Feng Taiyu Qi, accounted for more than half of the shoe making capacity in mainland China.

According to Reuters, Adidas said passenger traffic has declined, mainly in Japan and South Korea, but added that business outside the Greater China has not been seriously affected. "As the situation changes day by day, it is not yet possible to quantify the overall impact of business in 2020."

According to the Wall Street journal, Puma, another Puma, which is also based in Germany, warned that the epidemic will impact its sales this year, which aggravated concerns about how the epidemic affected the sports equipment industry. China has long been the market and production base of the industry.

Puma expects sales growth to slow sharply. Sales adjusted by exchange rate in 2020 increased by 10%, down from 17% in 2019. The company said that because of the uncertainty caused by the spread of the epidemic, even if it is to achieve that goal, it may also be a bold expectation. Bj, RN Gulden, chief executive of Puma, said that sales in China were almost zero in February, accounting for about 12 to 13% of its total sales and two to three weeks later.

Domestic brands are too dependent on the line. The industry situation is not optimistic.

Throughout the domestic brand, most of them rely on offline sales, but now the postponed holidays, the closed shopping malls and empty streets are just nightmares in their eyes. Without sales, there will be no cash flow. At the same time, wages should be paid as usual, and the heavy cost of store rentals should also be borne.

As the premier Lining brand in China, after the resumption of the sports science research center in Tongzhou, Beijing, in February 10th, the Lining group asked the management to go to the company to work under the conditions permitted. Ordinary employees only need to work at home. "For different sports products, to do different sports characteristics research, these content research center staff have not stopped working, to provide strong technical support for new products." Lining, a responsible person, said.

But what worries the industry is that in recent years, Lining has been actively laying down the line, forming a planned offline sales network. With the spread of the epidemic, Lining's overall business can not be unaffected. According to the financial report released in the mid 2019 (January to June) released by Lining, the total number of stores opened by Lining in the whole country was 7294, of which 2251 were directly operated by the company and the rest were dealer shops.

Similarly, Anta, the leading domestic industry, has 12479 stores in the first half of 2019. The cost of staff salaries is as high as RMB 1 billion 850 million yuan in the six months, 310 million in the month, and the total cost of rental in 2019 is more than 1 billion yuan, with a monthly average of 167 million. Therefore, Anta spent at least 400 million yuan a month on store rentals and staff salaries.

As the offline shops are affected by the epidemic, they have to follow the requirements of epidemic prevention in various provinces and municipalities. Anta group has been actively serving consumers' shopping demand through the electricity supplier channel, and has been launched in the first few days of the epidemic. With the participation of more than 30 thousand employees and distributors, the sales team and brand support team, as well as all the management and sharing teams, have been involved in the "full retail" project. At the same time, with the help of brand spokesmen and signers, they can record short sports videos to encourage consumers to move around at home and interact with consumers widely.

For a long time, the two week before the Lunar New Year is the selling season of the sports brand industry, and most of the domestic sports brands rely on offline sales. Now the delayed holidays, the closed shopping malls and the heavy shop rental cost also cause great losses to the enterprises. According to statistics, in the last two weeks of January, Nike's share price dropped by about 7.9%, while Adidas's share price dropped by about 8.3%, while Cage dropped by about 9.3%.

As we all know, Tmall organizes different types of promotional activities every month, and guides a lot of traffic to major Tmall stores to promote business. But so far this year, Tmall has cancelled most of its online activities in February, which is even worse for sports brands.

Stock accumulation is very frightening 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.

Expert analysis, affected by the epidemic, the current sports brand online retail sales have been greatly affected, so production has not yet returned to normal level, but after the end of the epidemic, the sports industry will usher in retaliatory growth, it is expected that the market supply will erupt, and enterprises will return to normal operation. Wu Guangyuan, a professor at Beijing Sport University, believes that R & D is the foundation of survival for sports brand enterprises. Many R & D projects will not be terminated due to the impact of the epidemic, which will also contribute to the development of enterprises in the future.