Under the impact of the new coronavirus epidemic, the performance of international sports brands such as Adidas and Nike has entered a “cold winter”.
Adidas’ financial report released on August 6 showed that its net sales fell by 35% in the second quarter of 2020. % to 3.579 billion euros, with a net profit loss of 295 million euros, compared with a profit of 531 million euros in the same period last year.
April was the peak period of global closures. Adidas closed almost all stores except the Asia-Pacific region, accounting for more than 70% of all stores worldwide. Since May, Adidas has begun to gradually resume store operations outside the Asia-Pacific region in accordance with the epidemic prevention regulations of local governments. By the end of June, 83% of stores had resumed business, and some of them had shortened their business hours.
1 Nike’s situation is even “worse”
its 2020 Revenue in the fourth quarter of the fiscal year was US$6.313 billion, a year-on-year decrease of 38.14%; net profit loss was US$790 million, a year-on-year decrease of 179.88%.
It is worth mentioning that the company’s performance has only failed to meet profit expectations twice in the past eight years. In order to cope with the loss situation and the market downturn, Nike decided to carry out permanent layoffs at its global headquarters, and at the same time vigorously strengthened its e-commerce and direct sales businesses.
2 Puma suffered a huge loss of nearly 100 million euros in the second quarter, and China cleared its inventory at a 30% discount
German sports brand Puma recently released data showing that the group fell into a loss in the second quarter of this year, with a quarterly net loss of 95.6 million euros. Affected by the COVID-19 epidemic, Puma’s net profit fell by 62% in the first quarter of this year, and about 80% of its stores around the world were closed.
At present, clearing inventory is still Puma’s top priority. The reporter found that Puma’s products in the Chinese market have already started three Sold at a discount.
It is reported that Puma’s sales in the second quarter of this year were 831 million euros, a year-on-year drop of 30.7%. Its chief executive, Bjorn Gulden, said the second quarter of this year was the most difficult quarter he had ever experienced.
3 “Never discounts” Under Armor relented
Affected by the epidemic, although most offline stores have resumed business, the closure of stores in the previous few months caused Under Armour’s Q2 sales in 2020 to fall by 41% year-on-year, and its net loss increased 10 times year-on-year.
This result has exceeded analysts’ expectations: When the last quarterly report was released, Under Armor expected that this quarter Revenue will fall by 50% to 60%.
The reality is far skinnier than expected. Under Armor also predicts that revenue may continue to fall by 20%-25% in the second half of 2020, and the decline will be even greater in the fourth quarter.
From January 2020 to now, Under Armor’s stock price has fallen from US$21.85 to US$9.93, a drop of more than half.
This once was the third largest sports brand company in the world, but now it is no longer in glory. In terms of market value, it has ranked outside the fifth place. In the front row are Nike (US$121.1 billion), Lululemon (US$42.7 billion), Adidas (US$27.9 billion), Anta Sports (HK$204 billion, approximately US$26.3 billion), and Vans parent company VF Group (US$23.1 billion).
The decline in performance is the main reason, but the “crux” is not just the epidemic.
4 Changes, discounts…
The reporter found that at present, the sports brand Nike’s discounts are relatively small, and there is basically no promotion-related publicity in Nike’s official flagship store on Tmall. In the official Tmall flagship store of Adidas, some products are only 50% off. Discounts as low as those of Puma are relatively rare.
Liu Liang said that judging from the current market situation, head sports brands are generally freed from inventory pressure. The new products of most sports brands can be sold at tag prices without discounts. In contrast, Puma’s focus is to speed up inventory clearance first.
An insider in the clothing industry told reporters from the Financial Associated Press that international brands are paying more and more attention to online interactions with consumers, because current online sales are no longer just through Selling on an online platform is so simple, but it requires in-depth contact with consumers.
“There are currently two directions for brand development, one is a brand with brand premium capabilities, and the other is a popular brand. The current information exchange shows a flat trend, and each brand Businesses are facing consumers directly, and the communication between brands and consumers is becoming more and more diversified, which will also bring some positive value to some global brands with standardized operations. As international brands pay more and more attention to the layout of the Chinese market, The entire industry is also facing transformation and upgrading, and sports brands will usher in a new round of changes.” Cheng Weixiong said.
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