Rushed to high-end feast ANTA sports business "downsizing"

Anta Sports Products Co., Ltd. (02020.HK, hereinafter referred to as Anta Sports), which has always used the “never stop” brand slogan, will once again step up the pace of capital operation and plan to enter the high-end sports goods market through the acquisition of international brands.

After divestment from Shanghai Feng, the main agent of the retail channel business, Anta Sports has accelerated the acquisition of international high-end brands. "The retreat is for better progress!" An insider close to Anta said, "This shows that Anta has completely abandoned the agency channel business that once was very popular, returned to its main business and accelerated the acquisition of international high-end brands."

streamline

Previously, Anta announced that it will sell its Shanghai Fengxian Sporting Goods Development Co., Ltd. (hereinafter referred to as Shanghai Fengxian) and its affiliates to Jiangsu Hesheng Investment Guarantee Development Co., Ltd. (hereinafter referred to as Jiangsu Hesheng) for 187 million yuan. . Jiangsu Hesheng is an ancillary subsidiary of Anta Jiangsu Jiangsu Zhonghe Trading Co., Ltd.

In 2006, Anta set up Shanghai Fengxian and its subsidiaries to represent the retail business of three international brands: Adidas, Reebok and Kappa. Jiangsu Hesheng is an affiliate of Anta Jiangsu agent, Jiangsu Zhonghe Trading Co., Ltd.

So far, with the exception of the six flagship stores that promote brand image and popularity, Anta will completely withdraw from the retail business. Currently, its sales channels are handled by 43 distributors, but these distributors have no equity relationship with Anta.

Anta said that in the future, it will adopt a more focused business model, focusing on brand management, production and wholesale business.

Prior to that, Anta had been very interested in the international brand retail business of Shanghai Fengxian agent, and believed that it could accumulate Anta's experience as a high-end brand and hoped to use the construction of retail channels to enter the high-end market in the first and second grade. In July 2007, Anta planned to invest heavily in the development of the business at the beginning of its listing, and increased its number of stores from 170 to 230-250.

However, less than one year later, the changes in the retail environment far outpaced the expectations of Anta Sports in 2006. The rising cost of business exceeded expectations and the competition was even fiercer. However, international brands did not increase their efforts to expand the market. . As of the end of 2007, Anta's retail business had a cumulative loss of 5.5 million yuan. The decline in profit margins of retail businesses representing international brands and business losses has forced Anta Sports, a listed company, to start rethinking from a financial perspective.

"This business is still profitable for others, but it is not matched by companies such as Anta," said An Shi, chief operating officer of Anta.

Double brand?

As the Shanghai Front Line was sold, the investment that Anta originally used for this business will change its use.

Lai Shixian also said that the funds will be used to acquire or operate international sports apparel brands. At the same time, he stated that he would not buy the popular brand and Anta would go up.

Anta positioning is still in the mid-range market, but it is impossible to cover all markets with medium-price points. "Anta is not very expensive to sell," said Lai Shixian.
At present, some foreign sportswear brands with good technical content and brand influence have a considerable market share in the international or professional market, but they are often discounted in the Chinese market. This provides an opportunity for Anta to develop high-end markets.

"The main reason is that they only rely on a single distribution agency approach and they lack a strong partner in China," said Sha Yifeng, general manager of Former Sharp Consulting.

Anta Sports is familiar with the Chinese market, and has a very good supply chain management, which can reduce the cost of raw material supply, while at the same time there are many channels of resources. This provides important capital for its cooperation with international brands, and it is obviously more cost-effective to acquire international brands that have a certain influence in the Chinese market than to spend two or three hundred million to create new brands.

A few days ago, Anta Sports had talked with several subjects. However, no actual agreement has been reached so far. "The acquisition may take a long time and it may soon be possible," said Lai Shixian.

ANTA Sports will operate international brands in two ways. First, it will acquire the latter's trademark ownership in Greater China. Second, it will establish a joint venture with the latter. International brands will invest in R&D capabilities and brands, while ANTA Sports will hold cash.

However, whether or not the sales of international brands will continue to use the current sales channels of Anta Sports, Lai Shixian said that it is not necessarily different. Different regions will have different considerations, and it is not possible to open up new channels.

"However, after operating an international brand, it is hard to say exactly what kind of impact it will have on Anta's current brand image." Shay Feng said.