Footwear Industry Analysis: In The First Quarter, The Growth Rate Of Footwear Industry In The Whole Country Dropped Sharply. How Did The Local Sports Brand Perform?

With the advent of May, Anta, Lining, XTEP and 361 degrees, and the Chinese operators responsible for Kappa's operation in China have released the latest quarterly operating data. Although the data dimensions released by each of them are not the same, it is mostly a happy growth from the published data.

In addition, the National Bureau of statistics released China's economic data for the first quarter of 2019. The growth rate of GDP in the first quarter was 6.4%, unchanged from the fourth quarter of last year.

Among them, the contribution rate of consumption to GDP is still the largest, reaching 65%.

However, the market of shoes and clothing under the line is not as red as expected.

From the macro data, the total retail sales in the first quarter amounted to 87146 billion yuan, up 8.2% over the same period last year.

In the retail items including commodity, cosmetics, communication equipment, furniture, Chinese and Western medicine, the growth rate of 3.3% of clothing, shoes and hats and needle textiles is third, only higher than that of negative growth of automobiles and 2.6% of gold and silver jewelry.

It is worth noting that clothing, shoes and hats and needle textiles increased by 9.8% in the same period last year, compared with 8% in 2018.

This data shows that the overall growth rate of clothing shoes and hats and needle textiles has decreased significantly, showing a downward trend.

According to the first quarter data released by several sports brands, Anta's multi brand is still the most powerful growth factor. It has recorded 65-70% growth and is far ahead.

Among all the main brands, Lining grew the fastest. Lining sales point (excluding Lining YOUNG) recorded a low 20%-30% growth year by year in the retail sales of the entire platform. The retail sales of XTEP online and offline grew by 20%. The retail sales of Anta brand products grew by 10%-20% in the first quarter compared with the previous quarter.

The Kappa brand (excluding Kappa children's clothing business and Japanese business) has achieved an increase in the number of units, but the line business is basically flat, while the retail sales of the 361 degree main brand (at retail value) have increased to the number of units.

In addition to the basic data of sales growth, the growth of same store sales has become a key increasingly prominent data in the retail era.

The essence of retail pformation is the promotion of efficiency, which is different from the past expansion of new stores through the continuous opening of new stores. The more refined retail era, the more shops are not necessarily needed, and the efficiency of stores becomes the core.

It can be said that in the current retail pformation era, store efficiency can be developed rapidly and healthily.

In the past five years, the reason why direct business has become the darling of the market is that once it works normally, its efficiency is higher than that in the dealer mode, but it can not be overlooked that the efficiency of Direct stores is also based on the overall market prosperity.

Therefore, direct camp is a means to achieve efficiency rather than a brand purpose.

Direct battalion is not equal to retail, and direct retail business is not equal to retail pformation.

Whether direct or wholesale distribution, as long as we can more effectively achieve the brand sales to consumers, it is from the traditional distribution mode in the past to enter the era of retail.

In the face of the overall growth of clothing, shoes and hats and needle textiles, the well managed dealers' stores are showing higher operating efficiency. Many of the previously hot outlets have no profit advantages, and the disadvantages of higher operating costs are gradually being magnified.

This makes the brand side need to have a more accurate judgement and grasp of efficiency and market changes when faced with these two choices.

Lining has made obvious adjustments this year.

In the first quarter of March 31, 2019, the number of Lining's sales outlets that had been put into operation started from the same quarter last year, and the number of high number of units in the direct channel of Lining was increased, and the low 10%-20% growth of wholesale channels was recorded.

The former was a low 10-20% growth in the same period last year. The growth rate of the first quarter of 2019 has declined, while the growth rate of the wholesale channel has increased significantly, from the number of units in the same period last year to the low growth rate of 10-20%.

On the number of stores, the total number of Lining outlets (excluding Lining YOUNG) totaled 6310, with a net decrease of 34 in the first quarter, of which retail business decreased by 105, and wholesale business increased by 71.

Lining's same store sales are in steady growth, showing a growth in the middle of 10%-20% (low 10%-20% growth last year), while the retail sales growth of Lining wholesale channel increased significantly compared with last year, while retail outlets continued to decrease.

In fact, since 2018, Lining has obviously adjusted the channel structure: in 2018, there were 4838 stores in Lining dealers, an increase of 117 compared to 2017, and 1506 outlets in direct retail stores, a net decrease of 35 compared with 2017.

As for the reduction of Direct stores, Lining himself said to lazy bear sports, "because of the continuous optimization, there are still inefficient shops and loss shops in the past. What is important to us is not quantity, but efficiency."

In the first quarter of this year, Lining also continued this direction.

Facing the overall growth momentum of clothing, shoes and hats and needle textile industry, the market may even have inflection point in 2019. Facing the downside risks of the whole market, how to be prepared for danger, seize the trend and respond to changes is the important issue in the next step.

At this time, the channel becomes the key word again.

Jumping out of the field of sports shoes and clothing, local clothing companies La Natsu Bell and Metersbonwe had a significant decline in their revenues and net profits in the first quarter. The net profit of La Natsu Bell fell by 94.4%. They invariably attributed the reason to the direct battalion system that had been pushed forward. "The adjustment process under the company's accelerating line, closing down the loss and inefficient Direct stores to reduce the ineffective investment of resources", "the company intensified its efforts to optimize the direct channel, closed down direct and inefficient stores, and affected short-term performance."

Mei Bang clothing clearly indicated that the expansion effect of franchising channels showed that the number of franchising revenue recorded a two digit growth in the first quarter.

This situation is consistent with Lining's current rectification direction.

Along with the boom of direct battalion and the increase of the proportion of direct brands, the camp seems to be showing a lack of vitality.

Direct battalion is a mode of direct investment, direct management, operation, direct response to consumers and quick response to the market. It has been a good medicine for channel reform in the past few years.

Usually, the direct store has a larger area, more products and better user experience, playing an important role in brand display and consumer experience.

But at the same time, direct operation means that brand enterprises need to bear higher costs and more resources, and once sales are weak, it will be difficult to sustain them.

It requires the brand side to take more risks.

The dealer mode has been criticized in the past due to overly extensive inventory crisis, but the agent system in the retail era, distributors and brands is not the past buyers and sellers but the partnership relationship. Dealers need to provide first-line data based on trust and accept the brand building's negotiations and guidance. The brand needs to help distributors sell products to consumers and provide sales and management support, so that dealers and brand partners can improve their efficiency more effectively.

Direct marketing and distribution are neither good nor bad. For a brand, if we can manage the distribution channels properly, we can have more room for imagination.

After all, in a vast China, dealers have an advantage in understanding the local market and fighting in the market.

It also helps brands reduce the risk of huge direct investment.

At present, Lining and XTEP, who have more trust in the properly managed dealer mode, have shown positive signs (Anta and 31st degree did not disclose the same store growth and direct distribution ratio data).

In the first quarter, Lining's same store sales on the whole platform grew by 10%-20% in the middle period, while 10-20% growth was low in 2018.

XTEP has gone through three years of pformation, more realistic and more "moderate" and smarter put forward the concept of "exclusive distributor", which does not need to bear the needs of personnel, capital and direct risks, but also can better control agents.

By the end of 2018, 60% of XTEP shops were directly run by exclusive distributor, and less than 20% before 2015.

In the first quarter of 2019, XTEP's same store sales enjoyed a low double-digit growth rate, which was consistent with the same period last year.

At the same time, the sales volume of the same store on the whole platform of Kappa decreased year by year, and the number of units dropped below the line business, which is a difficult brand pformation period for them.

However, they also stressed that the first quarter "customer adjustment has been completed in the first step of the channel reform". "The self operated system and the direct business customers account for more than 90% of the total business of the company. Next, the group will actively promote the connection of the retail end system of the direct customer and the company's ERP system, so as to provide accurate information for the next rapid mobilization of the products."

This is a signal to strengthen the management and control of distributors to enhance efficiency.

The advance and retreat of distribution stores and direct stores will become the noteworthy data of sports brands and clothing and footwear industry in 2019.

It reflects the direction of the market and may determine the next opportunity.

For every brand, the change of the industry is eternal, but it is permanent to adjust according to the change.