On March 24, International Olympic Committee President Bach and Japanese Prime Minister Shinzo Abe reached an agreement that the Tokyo Olympics will be postponed to 2021. This will also be the first time in the 124-year history of the modern Olympic movement that the Olympic Games have been postponed due to non-war reasons. . What was originally a sports year suddenly turned into a year to fight the epidemic.
The stock prices of domestic sports giants do not fall but instead
Affected by the epidemic, life in optional consumer industries such as sports is not so easy, and the stock prices of listed sporting goods companies have been falling. I thought that the postponement of the Olympic Games would make things worse for Chinese sports brands that were preparing to show off their talents in this event. Unexpectedly, after the news of the postponement of the Olympic Games was released, Hong Kong stocks continued to rise. Li Ning soared by more than 10% at the opening, and Anta rose by 9.97%.
Anta: Slow down the pace of expansion and increase the proportion of online operations
SinceFebruary1,AntaSports’stockpricehascontinuedtofall,fromalowofHK$70/sharetoHK$42/share,settinganewlowinthepastyear.
OnMarch24,the2020TokyoOlympicsannouncedthatitwouldbepostponedforoneyear.Asasponsor,domesticsportsbrandAntaSportsalsoreleasedits2019financialreport,withtotalrevenuefortheyearreaching33.93billion.Yuan,exceedingthe30billionmark,ayear-on-yearincreaseof40.8%;netprofitattributabletoshareholdersreached5.34billionyuan,ayear-on-yearincreaseof30.3%.Anta’s”singlefocus,multi-brand,omni-channel”developmentstrategyhasshownresults.Attheendoftheday,AntaSports’stockpricerose8.27%tocloseatHK$53.65pershare,anditsmarketvaluerosetoHK$145billion.
Infact,asearlyasOctober2019,AntabecametheofficialsportswearsupplieroftheInternationalOlympicCommittee.Accordingtothefinancialreport,bytheendof2022,Antawillprovideclothing,shoes,accessoriesandotherequipmentforthe2020TokyoOlympics,2022BeijingWinterOlympics,2020LausanneYouthOlympicsand2022DakarYouthOlympics.Thecreativeideas,marketingstrategies,andproductsoriginallypreparedfortheTokyoOlympicshaveallbeendelayedforoneyear.Coupledwiththedualimpactoftheepidemic,Anta’sinventorycyclewillslowdown,therebyexacerbatingthecompany’sinventorybacklogproblem.
However,thenamewillstillremain2020TokyoOlympicsafterthepostponement.Fortheready-madeclothingandpromotionalmaterials,atleastthereisnoneedtore-producethem.
WiththeeffectivecontrolofthedomesticepidemicinMarch,storeefficiencyhasimprovedsignificantly.Atpresent,Anta’sownfactoryresumptionratehasreached100%,andoutsourcingfactorieshaverestoredmorethan90%ofproductioncapacity,95%Thestoresoftheabovegroupshaveresumedoperations,andtheoperatingconditionsareexpectedtocontinuetoimproveinthesecondquarter.Inaddition,Antaaddedamicro-businesspartinFebruary,whichmadeitsofflinebusinessalmost”shocked”whilemakingupforitsofflinelossesthroughonlinebusiness.
LiNing:increaserevenue,reduceexpenditure,controlinventory
2020 is the 30th year of the establishment of the Li Ning brand. Last year, Japanese-Chinese and Uniqlo Korea CEO Takeshi Kosaka joined Li Ning as executive chairman and co-chief executive. According to Takeshi Kosaka, Li-Ning showed strong growth momentum in January. In February, affected by the COVID-19 epidemic, customer flow in physical stores dropped significantly, making Li-Ning Group inevitably endure certain pressures and tests. Closing stores has become the mainstream, which has had a great impact on Li Ning’s performance as a whole. At present, we can only choose to reduce the impact of the epidemic through two major measures: increasing revenue, cutting expenditure, and controlling inventory.
Unlike Anta, which attaches great importance to sports events, the postponement and cancellation of various sports events such as the 2020 Tokyo Olympics has not had a significant impact on Li Ning because this is not the main driver of Li Ning’s business. The losses are within the controllable range and can be fully compensated through other aspects of business.
Global events have been postponed due to the epidemic, but it has had little impact on the e-sports industry. In January last year, Li Ning acquired Snake Esports and changed its name to LNG Esports. Although e-sports cannot bring global and national exposure to brands like the Olympic Games, it can help them capture the young market and develop a new product line “China Lining” that was only 2 years old.
Offline store operations are hampered, and cloud shopping-online mode has become a life-saving straw. Li Ning Group connects online and offline channels at the same time, mobilizing all employees, including offline stores, to use personal social media to promote products and seize every potential business opportunity. At the same time, it also always pays attention to offline channels and targets every customer. Take timely measures to respond to changes in the environment of offline channels.
When the market picks up, we will not be eager to sell everything across the board. We will make overall inventory adjustments based on different styles, categories, launch quarters and rhythms, and carry out rhythmic inventory digestion. , ensuring that the overall inventory level in 2020 is within control.
At present, Li Ning’s factories have basically resumed work, production capacity has basically restored, and nearly 95% of offline stores have basically resumed normal operations.
International sports brands actively respond
Nike: Online sales have been Unabated
As a world-renowned sports brand, Nike products are distributed all over the world. Currently, the main sales regions are Europe and the United States, followed by the Middle East, Africa and the Asia-Pacific region. As the COVID-19 epidemic spreads around the world, Europe and the United States are suffering an increasingly severe impact from the epidemic. Nike is also facing greater pressure to close stores. Future revenue in these regions will obviously decline to varying degrees.
The financial report shows that Nike’s revenue in the third quarter of fiscal year 2020 was US$10.1 billion, a year-on-year increase of 5.1%, much higher than the expected US$9.5 billion, and the diluted revenue per Share earnings were US$0.53, compared with US$0.68 in the same period last year, a year-on-year decrease of 15%, which was not much different from the expected US$0.52.
In February, Nike hosted an event during New York Fashion Week to showcase its Olympic uniforms and the brand’s latest product innovations, including performance running shoes and sustainability of footwear and apparel. The brand originally planned to focus on introducing these latest clothing and footwear innovations at the Tokyo Olympics as the climax of the entire new product promotion plan. But now that the Olympic Games have been postponed for one year, if the promotion that has already started is forced to continue as originally planned, the effect will definitely be greatly reduced. Woozle Research, a British financial research institution, estimates that Nike’s losses may exceed US$5.5 billion in the next three to six months.
However, at present, its online sales have continued to increase, which has eased the inventory pressure this quarter and may be able to recover some losses.
Adidas: Confidence in daily high-frequency consumption
Although the 2020 sports calendar has collapsed, Adidas has no plans to cancel large-scale marketing activities prepared for the European Cup and Tokyo Olympics. The company’s CEO believes that these marketing activities have already been carried out to a large extent, and consumers will not give up purchasing sports products because of the postponement of the event. At the same time, we will continue to invest in marketing activities that can enhance the company’s profits and brand awareness.
However, due to the impact of the epidemic, stores have been closed one after another and the offline shopping scene has disappeared, causing Adidas to suffer setbacks in the company’s important source of income. But in terms of marketing expenditures this year, they plan to keep in line with last year and continue to maintain a budget of about 3.5 billion euros. At the same time, Adidas stated that its performance in 2020 will not undergo earth-shaking changes due to the impact of the epidemic. In the past three years, Adidas’ DTC business has changed its face, and consumers have formed daily high-frequency consumption habits. This will not only help Adidas tide over the current difficulties, but will also have huge positive benefits for its future.
ASICS: Under great pressure, try our best to promote the success of the Olympic Games
Relevant information shows that ASICS, a Japanese sports brand that occupies the home field advantage of this Olympic Games, paid 15 billion yen a few years ago to become a “golden partner” of the Tokyo Olympic Organizing Committee. Moreover, ASICS formulated a five-year plan in 2015, aiming to achieve global sales of 750 billion yen in the 2020 Olympic year. Now that the Olympic Games have been postponed, it will be difficult for ASICS to achieve such results this year.
In addition to providing sportswear for Japanese national athletes, ASICS will also provide uniform clothing for all Olympic volunteers. Under the exclusive agreement, ASICS will be the only official sponsor of the Tokyo Olympic Organizing Committee in the sports brand category. For this, Asics paid a high price. Given that ASICS has invested a huge amount of money and cannot realize it as scheduled this year, the pressure can be imagined.
Currently, ASICS is actively cooperating with various partners such as the Olympic Organizing Committee to provide support to athletes and related parties. ASICS said, “We have not yet discussed the impact of (the postponement of the Olympic Games) on the sponsorship agreement. We will still do our best to promote the successful hosting of the Olympic Games in the future.”
It is predicted that after the epidemic, In this era, people will engage in retaliatory consumption because they cannot go out for too long, especially in terms of sporting goods. After experiencing the COVID-19 epidemic, people will pay more attention to their health and spend more time on sports. Based on this, sports The industry is expected to face a good development opportunity. </p