Can Sports Brand Industry Get Out Of Difficulties Next Year?

Prior to

After the United States and the United States, the domestic clothing industry's stock mines broke out for six months, which made it clear that the PEAK sports (01968.HK), which had no shortage of stocks in 2012, did not dare to slack off at the beginning of the year.

As one of the representatives of sporting goods brands in Jinjiang, PEAK has been troubled by high inventory prices and serious homogenization in recent years after its rapid development and favorable listing in Hong Kong.

Recently, Xu Zhihua, chief executive of Peak Sport Products Co Limited, admitted in an interview with reporters: "the goal of eliminating inventory at the beginning of this year is still expected.

However, the whole industry will really get out of difficulties next year. "

In the year of adjustment in 2012, PEAK has been gradually clear about the fine line reform of the offline channels and the relocation of e-commerce business.

"Back rule"

In this year's semi annual report, Lining (02331.HK), Anta sports (02020.HK), PEAK, 01361.HK (31st degree (01361.HK)) and China trend (03818.HK) have seen a slump in the revenue of the five sports brand listed companies, and only XTEP's sales revenue has increased in the same period.

Among them, PEAK's total revenue in the first half of 2012 dropped from 2 billion 256 million yuan to 28.5% yuan to 1 billion 610 million yuan, while net profit also dropped to 240 million yuan, down 43.3% from the same period last year.

Then came the sound of a shop closing and complaints from distributors.

Faced with the collective predicament of the industry, Xu Zhihua said that the real core of the inventory crisis is the imbalance between supply and demand of high growth and actual supply and demand.

"This year is the critical point of the two growth expectations and the weak growth of consumption, which has led to a collective increase in inventory.

This year or even next year will be an adjustment year for the industry. "

According to the news of PEAK at the beginning of the year, the retail terminal inventory of PEAK is about 1 months, and the distributor inventory is 5-6 months, with a total of about 6 months.

"The group will strive to digest inventory this year, and it is possible to solve the inventory problem in the year."

One solution is to reduce the expected performance and reduce the "back rule" of order quantity.

Liu Xiang, deputy director of PEAK's public relations department, told the media that in 2012, PEAK would reduce its growth forecast to below 20%.

In January of this year, PEAK announced that it had adjusted its first, second quarter orders. The total volume of orders in the first two quarters decreased by 20%-30% and adjusted the number of retail outlets from 7806 to 2011 at the end of 2011.

It said, "our biggest channel reform is refinement. In the past, we were the provincial generation mode, and now we are gradually developing to the model of the prefecture level.

That is to say, an agent in a province is now an agent of two or three prefecture level cities or even a prefecture level city, so that the channel is more flatter.

However, as a listed company of Hong Kong stock, PEAK, can it be recognized by the market if the expected way is lowered? This year, the share price of PEAK sports has been lingering low, and it has been collected at HK $1.52 / share in October 25th, which is less than 6.18 Hong Kong dollars / share in the same period two years ago.

"Now some investors may pursue more short-term interests, but as a major shareholder, we need to balance short-term interests and long-term interests.

It is hard to say that the operation is difficult. At least our cash flow is not so ugly. Although profits have declined, they still remain on a certain base.

Electronic business turn around

As an usual means of dumping stocks, sports enterprises continue to expand their channels.

However, the brand dealers have rebounded seriously in recent years, and the protest is directly related to the serious internal consumption of "price civil war" under the line.

Xu Zhihua said that in 2006, PEAK began to enter the field of electricity supplier. The biggest challenge was the low price criterion that Chinese electricity suppliers had formed.

This will inevitably create a certain contradiction between the electricity supplier and the line, which is very painful for the company.

"After a period of adjustment, the company decided to take the strategy of" offline as the main business, supplemented by electricity providers ". This decision has been debated for a long time, because although it is meaningful, it is not easy to operate.

Specifically, the company defines the e-commerce business as an extension of our offline consumption, selling off season goods and additional licensing.

Some limited edition products eventually become a platform based on affiliate marketing.

Xu Zhihua said, "what the company is doing now is to get all the members of the line to get through, and there are more than ten million members."

As a manager himself, Xu Zhihua has invested this year as an angel investor in a C2B custom shoe website called "love fixing customer".

Speaking of personal electric business attempts, Xu Zhihua pointed out: "love fixing customers" is my understanding of the future e-commerce. E-commerce is loved by young people and is an irreversible trend in the industry. Therefore, it is necessary to participate actively.

After the "love fixing customer", there are still some other electricity supplier projects.