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Sports brands to see sales chill continue (2)

By Wang Zhuoqiong (China Daily)

08:27, December 28, 2012

Meanwhile, Anta Sports Products Ltd saw its first-half revenue down 11.6 percent year-on-year to 3.93 billion yuan. Anta said that its orders for the first quarter of 2013 have fallen by 20 to 30 percent.

Research reports from China Merchants Securities Co Ltd estimated that the four major domestic sports brands - Li Ning Co Ltd, Anta, Xstep and China Dongxiang (Group) Co Ltd - have stocks that are worth more than 10 billion yuan.

In sharp contrast with the efforts to clear up the inventory, apparel prices at sports shops keep climbing.

The increase in apparel prices has seen market conditions deteriorate and pushed up stocks, Xiong Xiaokun, an industry researcher with the CIC Industry Research Center said.

Inflation and increases in costs such as labor, logistics and rents have encouraged the apparel retail channels to boost prices, Xiong said.

A sluggish global economy has also weakened demand, the researcher said, adding that a lack of specific characteristics when it comes to branding and positioning from local sports brands is also a major reason for the high stocks.

Xiong has some hope for the apparel industry next year due to the positive economic expectations.

But he said that acquisitions and reshuffles may be seen in 2013 if the industry remains depressed.

Next year will be a critical time for Chinese sports companies to get back on the growth track.


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