Sports Brand Seeks PEAK, London Olympic Games

Since last year,

As a result of the general decline in performance, due to the lack of home advantage and large shrinkage of revenues, many brands invested less in this year's London Olympic games than the Beijing Olympic Games 4 years ago.

However, PEAK sports (01968.HK) has done the opposite.

In 2008, only one Iraqi team was sponsored, but 7 were sponsored this year.

A person who has studied sports brand for a long time reckon that PEAK's investment in Olympic Games has increased by at least 7~10 times this year.

Maybe it's because of big investment.

In the earnings report released last weekend, it is estimated that the unaudited consolidated net profit of the group in the first half of this year and this year will be significantly reduced compared with the same period last year.

However, in 2011, PEAK's sales in Asia reached nearly 200 million yuan. In Iraq, Lebanon and other places, PEAK had the top three market share.

However, PEAK, a local sports brand that has been internationalized, is interested in expanding its business territory with the help of the Olympic Games.

By the end of 2011, PEAK's overseas market sales accounted for 10% of the group's total sales.

PEAK said it will sponsor Olympic delegations in 7 countries including Iraq, New Zealand, Slovenia, Algeria, Lebanon, Jordan and Cyprus.

Although these recipients are not strong enough to win gold, their sponsorship fees are relatively low compared with the hot countries.

Like PEAK, this time

There are also Anta (02020.HK).

A month ago, Anta announced the exclusive sponsorship of the Chinese sports delegation's Olympic Champion Award dress.

According to the earnings report, Anta's advertising and publicity expenses will account for 14% of the total turnover this year. According to the turnover of 8 billion 900 million yuan in 2011, the cost of sports marketing, including the Olympic Games, has exceeded 1 billion 200 million yuan.

Ding Shuibo, President of XTEP (01368.HK) also told reporters that this year's Olympic investment will not be like the "handwriting" four years ago.

Behind this, apart from London Olympic Games has no home advantage for China, the slowdown of local sports brands is also a major factor.

Take PEAK, which is against the trend, as an example. Last year's performance was not satisfactory.

Not only net profit fell 5.4%, 780 million yuan, inventories also rose 25.73%, inventory turnover days increased from 38 days in the previous year to 49 days.

At the same time, the results showed that the amount of PEAK orders in the fourth quarter of 2012 (calculated at wholesale prices) decreased by 20% to 30% compared with the same period.

The average wholesale price of footwear and clothing is zero growth.

Under the environment of collective adjustment of domestic sports brands, PEAK also intends to control the pace of expansion in the domestic market and optimize the retail outlets.

By the end of the first quarter of this year, the number of authorized retail outlets in China has reached 7523, a decrease of 283 compared with the end of 2011. It is estimated that by the end of 2012, the number of authorized retail outlets in the group will be about 7000.

However, PEAK said it is planning to expand its overseas stores.

At present, PEAK has more than 200 stores in more than 80 countries and regions around the world.