2019 Drop In 37.40% In The First Quarter, And Recovery In Losses

In April 30th, the first quarterly report released by the precious birds showed that during the reporting period, the operating income was 520 million yuan, a decrease of 37.40% over the same period last year. The net profit of the shareholders belonging to the listed company was more than 1390 yuan, representing a decrease of 83.66% over the same period last year. The 2018 annual report released by the same period showed that the total loss amount of the bird in the previous year was 690 million yuan RMB in the year of 2019.

Since landing on A shares in Shanghai in 2014, the market value of expensive birds has exceeded 40 billion yuan, becoming the only domestic listed sports brand after Anta.

But in the process of pformation from the traditional sports brand to the industrialized group which is dominated by sports clothing and various sports forms, the ability of the noble bird failed to support its ambition.

How David beat Goliath

General Philip Goliath is a legendary famous giant. During the battle of the Philippians in Israel, Goliath fought for 40 days until he met his old enemy, shepherd David.

David's figure is far away from Goliath. If he faces Goliath in the face, he will have to die before David.

Fortunately, David chose weapons instead of spears and shields that Goliath expected, but stones and whips.

When David threw the stone out of the whip, and was in the middle of Goliath's face, the latter fell to the ground, and the Israelites had their king David, and the whole world got the only way to win the battle with weakness.

If Nike and Adidas are compared to Goliath in the sporting goods industry, then the "noble bird" is obviously carrying the wrong weapon.

Like Anta, XTEP, and 360 degrees, the precious birds also come from Chai Tai, Jinjiang.

From 1987 to 2002, with the appeal of spokesperson Andy Lau and Cecilia Cheung, the market became popular. In just 15 years, the precious bird came out from the shoe factories of more than 3000 Chen Dai towns and became another world card of Jinjiang shoes.

Andy Lau and Cecilia Cheung speak for the birds of honor.

Like the success of Anta, and other brands, the famous bird's road to fame is also dependent on the depth of the Chinese market.

The widely existing three or four line city has laid a solid foundation for the growth of the noble birds. At that time, it focused on the development, design, production and sale of sports shoes and sportswear. During the period from 2009 to 2011, the proportion of shoes and garments in main business income reached 100%, 99.97%, 99.98%, and the number of stores in the market rose to 5067.

If it were not the outbreak of the whole industry in 2012, maybe the trend of all stories would be rewritten later.

Since the end of 2011, a dual crisis of macroeconomic adjustment and high inventory has made domestic sporting goods equipment manufacturing enterprises enter the cold winter collectively.

You can't escape the heavy birds in this field.

The duration of the cold winter lasted for a long time, so that in 2013, the annual report showed that the operating income was 2 billion 406 million yuan, down 15.74% from the previous year, and operating profit was 522 million yuan, a decrease of 12.91% over the same period last year. The net profit of the company was 423 million, down 19.79% from the same period last year.

After swallowing the bitter fruit of "putting eggs in the same basket", in 2014, when the listing of the great bird was launched, the future development strategy of the company was positioned in the sports industrialization group based on the manufacturing of sporting goods and clothing and the coordinated development of various sports industry forms.

In a sense, the formulation of this development strategy is not only a realistic portrayal of "once bitten by a snake, but afraid of the rope for ten years", and also an inevitable choice for the birds and birds who are not satisfied with the safety of the three or four line cities and longing to stand on the world stage. Any enterprise wishes to be the leader in their field. When Lining and Anta have successively been in the first and second tier cities in the country, and Nike and Adi have not been in the clear wind, the great birds hope that the leading role in the next station is themselves.

Diversified business development trap

In 2015, 240 million yuan became the second largest shareholder of the company. In July, it was invested by The Best of You Sports, S.A (BOY) in Spain's football economic company; in June 2016, it was invested in Jay; in July, it was invested in Xing you technology; in August, it was a famous shoe store, and in 2017, 100% holdings in the shoe store were completed.

During this period, the Xiamen bird invested 65 million in 2016 with the fusion technology of Guangdong to create an insurance company. However, in just 8 months, the insurance company was declared cancelled. If it was added to the 2017 acquisition of Wellcome fitness and failed to appear on the market in 2014, the diversified development strategy of "bird of paradise" can almost be described as "hungry for food".

This is not Lenovo's acquisition of IBM's "snake swallow elephant". It also differs from Anta's development strategy through its acquisition of foreign sporting goods brands and further development in its main business area.

The diversification strategy of the past 5 years has been full of the "crossover" thinking of the Internet, but what is worse is that the "noble birds" who have cross boundary thinking do not have the ability to execute beyond the border.

It is a right direction to scatter too much energy from the main business.

Although these investments have brought a 69.38% increase in the revenue of 2014 to 2017, the net profit attributable to parent companies has dropped by 49.68%, which was the foreshadowing of the price of the birds in June 2018.

As one of the representative brands of shoes enterprises in Jinjiang, there is no mistake in terms of diversification strategy.

Alibaba started with electricity providers and grew into the world's top 500 enterprises integrating business, finance, entertainment, sports and many other industries. It is based on the implementation of the diversified development strategy of enterprises.

But the mistake of the great bird is that its implementation of diversified development strategy is too fast and fierce. Under the situation of its own ability is not enough to support multiple layout, from a single manufacturing industry to social, brokerage, retail, insurance and other fields, although there are sports in this area, but the precious birds failed to achieve substantive links in various fields in the unit time, which led to its frustration on the road of diversified development.

In 2018, the precious birds first made 143 million of the price, pferred the shares of the sports club, then sold the tiger stock sports shares by 273 million, and at the end of the year, they pferred Jay's shares at the expense of 130 million.

A series of sales of assets, marks a bird in the diversification of business development strategy adjustment into the practical level, after the reality of the head-on, the bird from one extreme, to another extreme.

Returning to the main business is a good choice, but after losing the opportunity to compete with Nike and Adi, the 4 years later, the gap between the domestic sporting goods camp and Anta, Lining and other domestic sporting goods camps has been gradually pulled apart.

Although Jinjiang and its subsidiaries have accumulated a total of 30 million 321 thousand and 100 yuan of local government subsidy since January 2019, they are: 10 million 580 thousand yuan of innovative development funds of the Finance Bureau of the city of Xiamen, 2 million 387 thousand and 300 yuan of reward and support funds; 14 million 108 thousand and 700 yuan of reward and support funds from the government of the Siming District Finance Bureau, and 3 million 14 thousand and 900 yuan of support funds from the local government offices of the people's Government of Siming District, and 230 thousand and 100 yuan of other subsidies, but this is nothing but a drop in the bucket for the expensive birds with a loss of up to 690 million yuan.

Where is the "noble" of the noble bird?

Back to 2017's first quarter earnings report.

In those days, the number of birds in the first quarter reached 768 million, revenue grew by 46.5% compared to the same period, and net profit increased by 1.49%, reaching more than 8300.

Behind this data, it is not that the performance of the famous bird brand has grown substantially. It has come from the sales of the brand sales such as Nike, ADI, Puma and so on. Its sales have been reduced to about 50% of the total revenue.

In 2019, the first quarter earnings report showed that the total revenue of the main brand was 412 million yuan, which accounted for 79.23% of the total business revenue of the quarter. After the pfer of Jay's shares, Nike, ADI and Puma earned 15 million, 32 million and 18 million of the quarter's revenue respectively. In addition to the 1.18% increase in Puma's operating income over the previous year, the sales revenue of Nike and Adi decreased by 89.67% and 68.67% respectively.

According to the quarterly report, by the end of March 31st, the number of retail outlets of the brand was 2830, of which 393 were in the first tier cities, 650 in the second tier cities, 1231 in the three line cities, and 556 in four line cities.

The three or four line city is still the main battleground of noble birds.

Although this is somewhat out of line with the lofty goals of the great bird, it is a reality that you must pay attention to now. After Anta opened the strategy of striding forward from the domestic brand to the international brand, Anta's marketing focus is bound to advance from the three or four tier cities to the first and second tier cities.

At this point, which enterprise can seize the market space left behind by Anta's strategic pformation, who may be able to replicate Anta's success once again.

XTEP and 360 degrees will be important competitors for the birds to win the market, but not the most important ones.

As a matter of fact, the most important competitors they face are whether they are birds or birds, or XTEP and 31st degree, but whether the three or four line cities will continue to favor the Jinjiang shoe enterprises if their disposable income continues to rise.

From this point of view, whether it is left to the birds or birds, or to XTEP, 31st degree time will be limited, Anta model in the future can be reproduced in other Jinjiang shoe enterprises, also said in two.

The real reference, perhaps the Lulu lemon, which started with yoga, and Skech, who began to build in the body, has finally gained the chips that compete with the industry's head enterprises for the market share.

After the diversification strategy has been frustrated, the return of main business birds may need to further shrink the front line and focus on the product line in order to really get the chance to turn over.