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Pay Close Attention To The Sportswear Market And Keep Shuffling. Is Capital Fair A Good Prescription?

2021/7/17 14:14:00 0

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Sportswear Market Sustainability Shuffle Capital Fair Yes A Pair

Despite its poor performance for many years, Reebok is still a piece of fat worth competing with in the eyes of many capital forces with its 100 year brand accumulation since its establishment in 1895. From the acquisition competition of Reebok by multiple capital forces, we can see that the sports market with strong growth has begun a new integration and differentiation.

Adidas bought Reebok for $3.8 billion in 2006, but Reebok's business has not improved significantly in the past 15 years. In February, Adidas officially announced that it would sell Reebok and hopes to complete the deal by the end of 2021. From the first round of bidding in May to the closing date of the second round of bidding on August 2, speculation about Reebok's future has been endless.

In addition to the US private brand management company authentic brands group (hereinafter referred to as ABG), wolverine, the oldest shoe company in the United States, Anta sports and Li Ning in China, WHP global, a New York brand management company, has recently become a new bidder.

Despite its poor performance for many years, Reebok is still a piece of fat worthy of competition in the eyes of many capital forces in the context of the strong growth of the global sports market and with the 100 year brand accumulation since its establishment in 1895.

WHP global, a New York based consumer brand management company, is a New York based consumer brand management company. It is good at integrating competitive advantages on a large scale through the acquisition of new brand management platform and the management of many global brands, so as to accelerate the brand growth.

Anne Klein was the first brand that WHP global acquired

American women's wear designer Anne Klein, known for its light and luxurious fashion watch products, is the first brand acquired by WHP global. Since 2019, WHP global has expanded its distribution scope to China, India and Mexico. In 2020, WHP global acquired Joseph Abboud, a men's wear brand, for us $115 million.

So far, WHP global owns Joseph Abboud, Anne Klein and toys "R" us. Previously, Yehuda shmidman, chairman and chief executive officer, has publicly said, "our goal is to save strong traditional brands in difficult circumstances."

? ABG, which offered $1 billion with footwear manufacturer Wolverine world wide in the first round of bidding, is an American brand management company founded by founder Jamie Salter in 2010

Wolverine world wide

In the past few years, ABG has completed a number of high-profile transactions in the United States, including the acquisition of luxury department store chain Barneys, fast fashion retailer Forever 21, Brooks brothers, sports illustrated and Eddie Bauer in late 2019 in cooperation with shopping center operators Simon Property Group and Brookfield property partners.

? ABG group also owns "Sports Illustrated" and basketball player Shaquille O'Neal, "boxing champion" Ali Muhammad Ali, "J doctor" Julius Erving and other IP. It is worth mentioning that Shaquille O'Neal served as Reebok brand ambassador in the 1990s. In addition, ABG has recently submitted a filing application to the US Securities and Exchange Commission for listing this summer.

Shaquille O'Neal was a Reebok brand ambassador

Although there have been news that ABG may withdraw from the bidding, there are also a number of analysts who have doubts about this, and there is no official response from ABG.

? In addition, a number of private equity companies, such as Anhong capital, Cerberus capital management company, CVC private equity company, and Indus investment, have also appeared on Reebok list.

It is not difficult to see that the scale of the global sports market and consumption demand are expanding, but there are also many competitive pressures from the international scope. In the face of industrial structure changes such as the new generation of consumers and new consumption habits, in order to achieve sustainable business growth, online and offline resource integration, including the new retail mode, is also closely related to the technical advantages and cultural resonance of sports brands.

? Among them, China's sportswear market, which has a particularly significant growth momentum, can be regarded as a strong shaker in the global market share.

With the continuous growth of market scale and the increasing enthusiasm of consumers for local brands, through a series of industrial chain improvement and marketing mode innovation, China's sportswear brands are showing greater development potential and space.

According to Euromonitor statistics, the market size of China's sports shoes and clothing industry will reach 315 billion yuan in 2020, while AI media consulting data predicts that the market size of China's sports shoes and clothing will reach 385.8 billion yuan in 2021. Under the premise that Guochao can more and more establish stronger emotional connection with local consumers, the Chinese sportswear market also shows significant development potential and space. In addition, the "Xinjiang cotton incident" has greatly increased consumers' reputation for many domestic brands.

? As of the end of last Tuesday, the shares of Li Ning and Anta, the two major domestic sportswear giants, registered an increase of 5.03% and 2.82% respectively, and their latest market value increased to HK $231.9 billion and HK $493 billion. At the same time, Li Ning and Nike have also taken a series of measures to further improve technical innovation, personnel training, value building, and brand volume.

Released by Beijing Winter Olympic Organizing Committee and Anta
National flag sportswear series of Beijing 2022 Winter Olympic Games

In June this year, Li Ning and Anta cooperated with Beijing Institute of fashion and Tsinghua University in the form of school enterprise cooperation. On the one hand, they are committed to the introduction and cultivation of professional talents, on the other hand, they are conducive to improving the efficiency of research and development based on fabrics and other technologies. On June 29, Li Ning also launched the "Li Ning center" in Guangxi ASEAN Economic and Technological Development Zone, with sports science research as the core, promoting the technological innovation of sports equipment and establishing the ecological system of intelligent manufacturing industry.

? At the same time, Li Ning and Anta also attach importance to the improvement of original design level and the upgrading of brand value in China. Li Ning Zeng officially said that the cooperation with Beijing Institute of fashion will jointly promote the high integration of Chinese traditional culture and sports fashion design. Before that, the brand had also released a brand-new military robe inspired by the blue dragon totem of the Han Dynasty tile and traditional Chinese decorative patterns, and held a 2021 autumn winter Trend Conference in Zhengzhou, Henan Province, which is also the hinterland of Chinese civilization and the shore of the Yellow River. Ding Shizhong, chairman of the board of directors and CEO of Anta Group, also said: "we should enhance the global vision and industry pattern of Chinese brands, and realize the leap of value level in building the core competitiveness of sporting goods enterprises."

Li Ning holds autumn and winter 2021 fashion conference in Zhengzhou, Henan Province

In addition, through the marketing strategy of cooperation between spokesperson and image ambassador, we can effectively win enough voice and market feedback in the era of social media. In March this year, Li Ning announced Xiao Zhan as the global spokesman for sports trend products, and Anta announced Wang Yibo as the global chief spokesman in April. On the day of the official announcement, Li Ning's share price rose by nearly 9% on the basis of the previous day's increase, and its market value increased to HK $10 billion. Anta official announced that Wang Yibo was the world's chief spokesperson. At noon on that day, most SKUs of the same model endorsed by Wang Yibo, the flagship store of tmall, were out of stock.

Anta official announces Wang Yibo as the world's chief spokesman

In addition, more domestic sports brands have shown optimistic development potential in recent years. In the first half of this year, the stock prices of 361 ° and Tebu increased by 293.52% and 306.85% respectively. In June this year, the company announced that Hillhouse would invest US $65 million (about HK $505.7 million) in the Global Investment Co., Ltd. to jointly develop the global business of K-Swiss and palladium brands.

As the public pay more and more attention to personal health and sports fashion, as well as the recovery of many sports events, the sportswear market is showing a strong growth trend. At the same time, the emergence of new brands, the participation of luxury brands, and the rise of national trend representing China's sportswear market have also formed an important force to change the global sports apparel industry. How to stop losses and retain strength through capital transactions such as sales, or to maintain and improve their own advantages by relying on technology research and development and mode innovation is a subject that many brands need to face.