Local Sports Brand Olympic Dilemma Is The Main Theme Of Negative Growth

To be sure, every session

It will not only be a feast for sports fans, but also a booster of some sports brands.

Adidas, the German sportswear and equipment manufacturer, has recently raised its annual performance target in the hope of stimulating sales in London and European Football Championships. Its net profit is expected to increase by 12%~17% in 2012.

However, the situation of domestic brands does not seem to be so optimistic.

In contrast to the enthusiasm of the 2008 Olympic Games in Beijing, this year's "Olympic spring" seems rather cold.

Many families

The company's annual report shows that the whole local sports goods industry collectively fell into a high storage dilemma, plus raw materials, labor costs, warehousing and other cost increases, the profit space has been challenged, the order growth rate has declined, and the growth of performance has further slowed down.

"Even if it is a rare opportunity for London Olympic Games, it will be difficult for the domestic sports brands to break through the current adjustment cycle."

Liu Peijun, an analyst at Shang Pu consulting industry, said.

In 2008, Lining lit the Beijing Olympic torch with a natural space step. It was undoubtedly the most brilliant year of Li Ning Co.

In 2009, Lining's sales volume reached 8 billion 387 million yuan, once becoming the second largest sports brand in the domestic market.

But at the moment, Lining has a lot of trouble.

The company's annual report shows that in 2011, a number of financial indicators such as company income, gross profit and net profit were negative compared to 2010.

Data show that Lining's inventory provision in 2011 was 188 million yuan, an increase of 63.48% over the same period in 2010. Due to the new wholesale discount rate and the rising cost of production, gross margin continued to decline.

On the other hand, Lining needs to maintain its size.

The total cost of distribution and administrative expenses increased by 3% to 3 billion 223 million yuan over the previous year.

Zhao Xiao, an analyst with China Merchants Securities, believes that Lining is facing the pressure of slowing growth in the industry and slowing sales.

Due to the slow growth of sports population in sports, more than half of the products in the market are sports life products, which reduces barriers to entry and improves competition in the industry.

At the same time, the cost increase exceeded expectations.

Labor costs may continue to rise at an annual compound growth rate of 10%~15% in the next 3~5 years.

The same shadow shrouded in almost all local sports brands.

The majority of local brands' advantages and sources of profits are concentrated in two or three line cities, such as XTEP, and about 80% of the retail outlets are located in two to four cities.

Although the channel has brought huge profits to these brands, it can not solve the fundamental problem.

In his view, as long as the number of stores has been growing, brand dealers will eventually face the problems of store rentals, labor costs and material costs.