Peak stores are mainly concentrated in second and third-tier cities, reflecting the shrinking advantage of local sports brands.
Peak CEO Xu Zhihua hopes to solve the inventory problem by the end of the year. Yesterday, the recent operation of the Chinese business disclosed by the Hong Kong-listed local sports brand was not optimistic.
It is reported that in the second quarter of 2013, the total order volume of the Group decreased by as much as 20%-30% compared with the same quarter of 2012. In addition, Peak has closed 1,067 stores in the Chinese market in the first three quarters of this year as of September 30, 2012.
1300 stores throughout the year or
Compared with 361 degrees, Xtep, Anta and other peers, Peak's closing speed and the size of the closing shop is second only to Li Ning, who had previously fallen to the throne. It is also worth noting that in the closed stores, the outlets of Peak's second and third-tier cities account for almost 90% of the total.
The reporter learned that the second and third tier cities have always been the focus of Peak Group's marketing in recent years. This means that in the face of the sinking of many Chinese and foreign brands' channels, the crisis of the second and third tier markets that have been regarded as an advantage of the local sports brand has intensified.
According to the Peak announcement, as of September 30, the number of authorized retail outlets of the Group in China was 6,739, a decrease of 1,067 compared with the end of 2011. As early as the first half of this year, the number of retail outlets authorized by Peak has been reduced by 747 from the end of 2011, closing nearly 10% of the stores.
Based on this calculation, in the past three months, Peak has continued to close 320 outlets. Prior to this, Li Ning had disclosed that the number of closed stores in the first half of the year reached 1200, and the number of Anta stores decreased by 110, while Xtep retailers increased by 7 nets, while 361 degrees had a net increase of 185.
According to Peng Hongxiang, an analyst at Guotai Junan International, Peak expects retail outlets to continue to decrease to 6,500 by the end of the year. This means that the number of closed stores throughout the year will reach around 1,300. The reporter noticed that among the outlets that Peak closed in the first half of this year, 67 were closed in first-tier cities, 299 were closed in second-tier cities, and most were in third-tier cities, closing 381.
â€œPixer began to optimize its distribution channels last year. In the retail network, they opened larger retail outlets through distributors and retail outlet operators and closed down more smaller, less efficient retail outlets. At the same time, they also considered reducing the number of retail outlets. The underperforming distributors manage the area,â€ a person familiar with the matter told reporters, but from the current operation point of view, nearly 90% of Peakâ€™s closed stores are in the second and third tier cities, and these cities have been the focus of Peakâ€™s marketing this year.
It is not difficult to see that Peake dealers are underpowered and competition is worsening under the influence of economic deterioration, electricity supplier impact, high store rental and labor costs, and insufficient demand.
Net profit fell by more than 40% in the first half of the year
The sharp drop in Peak's 2013 orders may also confirm this speculation. It is reported that at the ordering meeting of the second quarter of 2013 held by the company in October of this year, according to the wholesale prices, the total amount of orders for footwear and clothing decreased by 20% to 30% compared to 2012.
"In the first half of this year, Peak's net profit fell 43.4% year-on-year, and clothing revenue accounted for a slight drop to 50.3%. Revenue changes are measured by price, mainly by volume, while sales volume is down by more than 20% year-on-year." An analyst at Shanghai Securities stated that this was mainly due to the negative impact of the inventory adjustment and weak economic conditions of the entire sportswear industry on the demand for sporting goods in the first half of 2012.
Constrained by this restriction, Peak's stocks continued to increase from January to June this year, and the turnover rate increased from 49 days to 86 days. Inventories rose from 421 million yuan at the end of last year to 529 million yuan, an increase of 26%, and the overall trend continued to deteriorate.
â€œAfter this, sports brands also related to store trends, but compared with this time, the former was the choice plus the initiative to close stores, and now it is the passive and stoppages that cannot sustain. And even more frightening is the current round of passive contraction and closures. Far from reaching the end, the crisis of sports brands has not yet bottomed out and continues.â€ Senior apparel industry sources told reporters.
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