Pay Attention To The Decline And Hot Sale Of Leather Shoes, I.E. Sports Shoes

After two years, Li Ning's acquisition of Clarks, a 100 year old British shoe brand, finally came to the end of the transaction.

On June 15, Feifan China, the largest shareholder of sports brand Li Ning, announced that the general meeting of shareholders had approved its acquisition of Clarks, a British shoe brand. It also means that extraordinary China is about to take a controlling stake in Clarks.

In 185, the kangaroo shoe was one of the most popular shoes in the UK, and it was also one of the famous shoes in the world.

　　 According to the first financial report, fanciful China is confident in the acquisition. The Board believes that the global retail market will recover after the epidemic and Clarks' business performance will improve.

However, contrary to the confidence of extraordinary China, the prospect of local leather shoes market is not as optimistic as expected.

Aokang, a local brand focusing on men's leather shoes, has put its focus on two sports shoes, i.e. skykey and puma, in the past two years. On Saturday, the women's shoes enterprise, which has been established for nearly 30 years, listed and transferred its shoes business at a price of 600 million yuan.

In addition to them, there are more once popular shoe brands in decline. Daphne, which once opened all over the streets and alleys, has long since disappeared from the women's shoe cabinet. The once famous man's business casual shoes rich bird once won the "king of China's real leather shoes" for four times, but now it has been completely annihilated after bankruptcy liquidation.

　　 But some people are in a hurry to take off their shoes, while others are busy putting them on.

Clarks is not the only non sports footwear brand acquired by fanciful China. At the beginning of 2022, Feifan China also acquired Amedeo Testoni and its derivative line i29 for HK $50 million.

In the past 20 years, with the drastic changes of fashion and market, sports shoes have carried the banner of shoe market with comfort and functionality, while leather shoes have disappeared in daily wear.

Open a shoe cabinet after 00, you can see a variety of brands, various styles of sports shoes, but shoes, but even a corner are difficult to own.

In this context, why should extraordinary China purchase non sports footwear brands one after another? In addition to Clarks' own public influence, what is the blue route for leather shoes to return to healthy growth?

　　?01? The decline of non sports shoes

Compared with the sports brand Li Ning is good at, leather shoes seem to be an unpopular category.

In China's shoe market, the word "fast" is at the forefront of the hot sports shoes, while the shoe sales counter is cold every year. ??

According to the statistics of China Leather Association, from 2015 to 2020, the output of China's leather shoes manufacturing enterprises showed a fluctuating downward trend, and the decline rate was large. In 2018, the output of China's leather shoes manufacturing industry was 3.63 billion pairs, a year-on-year decrease of 18.97%. By 2020, the output of leather shoes manufacturing enterprises will shrink again, with a value of 3.21 billion pairs, a year-on-year decrease of 18.73%.

　　 The data from prospective industry research institute is also not optimistic. It is estimated that the domestic leather shoes industry will shrink to 1.7 billion pairs by 2026.

If, this can not confirm that the domestic leather shoes industry is on the bench, then, there are many listed shoe enterprises in the market. In the past, the old shoe company Fuguiniao withdrew from the market and went bankrupt. Later, Aokang, a national shoe enterprise, transformed into sports casual shoes. The cold situation in the leather shoes market is not just happening now, but frozen in the wearing experience day after day.

Why do more and more boys like to wear leather shoes?

Gao Zan answers from different angles, but the logic is similar.

First of all, leather shoes can no longer become a social image bonus item. Most of the time, people wear formal clothes, not because they like and comfortable, but simply to meet the dress needs of social occasions. In addition to business banquets and other scenes, we have rarely seen suits in daily life. At present, only in some industries, formal dress is still required.

Secondly, it's not easy to buy a pair of shoes that fit. Once Wenzhou's shoe and leather industry ran from north to South and was planted in the streets and alleys. At one time, people thought that making leather shoes was a simple job. But in fact, only those who have bought or worn shoes know how difficult it is to buy a pair of shoes that fit well.

If you buy a pair of sports shoes at random in the shop, even if it is not comfortable, it will not grind your feet to the point where it is difficult to walk. But if it is a pair of shoes that do not fit, the consequences are likely to be bloody.

　　 Most of the domestic leather shoes enterprises were founded in the last century. Brands like Aokang and red dragonfly, for the 90 generation, most of them are in the era of "Hailan home". Therefore, even if there are many stores and enough popularity, the sense of identity is not very good.

Moreover, compared with sports shoes brands, leather shoes brands mostly exist in street stores and very traditional department stores. It is not as easy to buy a pair of sports shoes.

In addition, leather shoes can be divided into cowhide, sheepskin, pigskin, synthetic leather and artificial leather according to the production materials. The other side of leather surface classification is the opacity of the price system. It is difficult for consumers to distinguish synthetic leather and artificial leather, so they are often very cautious when choosing brands.

In order to maintain consumer confidence, the founder of Aokang once burned thousands of pairs of fake leather shoes at fairs, and set up products and services including guaranteed repair, replacement and return. However, as time goes by, after-sales system has been established, but consumers have gradually lost.

　　?02? The temptation of a good pair of shoes

Compared with the stereotype that domestic leather shoes are "uncomfortable", Clarks, a British shoe brand, has a much better reputation.

In the little red book, enter Clarks, the relevant content will generally mention: fit, comfortable, not tired at work and other keywords.

Indeed, comfort label is too important for non sports shoes.

The NPD group, an industry market research agency, once wrote in a report: "With the continuous development of casual shoes, comfort is no longer an additional benefit. On the contrary, it is an essential condition for consumers. At the same time, people's expectations of shoe technology are still high, and multi-function is the first factor they consider, because consumers want their shoes to work under various conditions."

　　 A few years ago, when the sales of high-heeled shoes were low, some market research institutions pointed out that the busy urban life required women to keep moving. Therefore, the sales of shoes with heels higher than 3 inches or higher generally fell the fastest.

It's the same with non sports shoes. Discomfort is the original sin.

In addition, in China's traditional shoe industry, there is a tacit consumption concept, "men wear brands, women wear styles.".

It's not about the high quality of men's shoes and women's shoes. It's not about the high quality of men's shoes and women's shoes.

However, with the rise of a new generation of consumers and the popularity of sports trend, people realize that leather shoes are difficult to compete with sports shoes no matter how comfortable they are.

In the view of the industry, Li Ning bought Clarks because it valued the reputation of this century old shoe-making brand.

This British shoe brand has been operating in more than 40 countries around the world. More than half of its revenue comes from the international market. At its peak, it can sell more than 50 million pairs of shoes, and even once was the world's first non sports footwear brand.

　　 However, since 2014, due to the rise of emerging brands, the impact of e-commerce, brand aging and other factors, Clarks has shown a downward trend in profits. Especially in 2020, Clarks was closed for several months due to the epidemic and suffered huge losses. Therefore, it had to seek a way out of the predicament. At this time, it happened that extraordinary China was actively expanding its consumer goods business.

In fact, Fanfan China's board of directors has said that the Clarks acquisition was a deal in line with its business plan and that it was acquiring control of Clarks at a reasonable price.

What is considered reasonable here may be due to two considerations. On the one hand, in the Chinese market, the middle and high-end leather shoes industry is basically dominated by international brands. Clarks, as a member, although the retail scale is small, there is still room for imagination.

On the other hand, from the perspective of market share, Clarks' brand strength is still strong even though it has encountered difficulties. Clarks ranked first in the UK casual shoe brands with 14.1% market share in 2021, ahead of the second ranked brand 9.6pct. In the U.S. casual shoe industry, Clarks ranked seventh with a market share of 1.8%.

Compared with making a new brand from zero to one, it is obviously easier to pick apples on the shoulders of giants.

　　?03?

There are potential opportunities, but not many

Formal wear awareness is declining, so, is there any potential opportunity for non sports footwear?

Judging from the performance of shoe enterprises and industry reports, there are, but not many.

According to a U.S. shoe industry sales report released by the NPD group in 2021, sales of fashion footwear totaled $3.9 billion in the second quarter of 2021, down 6% from $4.1 billion in the same period in 2019.

　　 Industry analyst Beth Goldstein said, "with regard to fashion shoes, too much attention has been paid to the rebound after the epidemic, but people forget that fashion footwear has been on a downward trend for several years in a row, and the epidemic only exacerbates this trend."

That is to say, although people are returning to social life, they may be ready to buy formal clothes, and non sports shoes may also have a performance rebound, but they can't keep this growth momentum all the time.

Taking Clarks as an example, in the 2022 fiscal year, due to the gradual recovery of the British, Irish and American markets and the continuous growth of customer demand, Clarks turned a loss into a profit in 2022 with a profit of 53 million pounds.

But even if it rebounds in a short period of time, Clarks's transformation has been slow for a long time, and it is difficult to adapt to the fashion preferences of young users. Of course, Li Ning's success in the market still needs experience.

So, what are the few opportunities—— Maybe it's Clarks' brand recognition with its own halo.

Generally speaking, the first pair of leather shoes of contemporary young people will never be because they want to buy them. He may have just entered the job search stage, he may have to attend a wedding or a meeting that needs to be dressed up, but in either case, he has to buy a pair of shoes in the end.

The implication is that leather shoes still have the property of rigid demand in business and specific social situations.

　　 The window of opportunity is here. For a young consumer, it is very simple to buy sports shoes. Popular brands and popular styles are familiar with their hearts. When you open the shopping software, you can place an order without too much thinking. However, it takes a little thought to buy a pair of shoes that can match the formal dress.

This is because the homogenization competition of Chinese leather shoes brands is very serious, and each leather shoes brand has not formed a clear brand image in the consumer heart.

For example, they are all shoe brands. When it comes to Aokang and red dragonfly, consumers will think of it as a leather shoes brand for the first time. But when it comes to eoco, Clarks and GEOX, they will think of it as a good leather shoes brand.

The difference is thus revealed. When Aokang, Senda and other domestic brands meet each other in the range of the average price of 500 yuan, international brands can easily complete the sales of 1000 yuan plus, which is the power of brand recognition.

In recent two years, domestic shoe brands have also jumped out of the price war, trying to move towards the value war. In 2021, Aokang put forward its slogan of "more comfortable men's shoes", while Red Dragonfly turned to young fashion, positioning its products as "suitable for work, fashionable in style".

However, whether the shoes fit or not is known to the wearer.

When young people don't wear shoes any more, even if shoe companies have made shoes that are comfortable to wear, no one will pay.