Home / Knowledge / News / Apparel/Garments / Chinese sportswear firms plan to trim retail presence
Chinese sportswear firms plan to trim retail presence
17
Mar '12
Several sportswear producers in China are planning to cut down the number of their retail outlets in the face of mounting raw material costs, labour charges and rent.

The sportswear companies feel that closing some of their less lucrative outlets would enable them to cut costs and enhance profitability.

The current plight of the Chinese sportswear industry can be gauged in results of three domestic firms.

Peak Sports Products Co Ltd's profits for 2011 dipped 5.4 percent year-on-year to 777.7 million Yuan or US$ 122.8 million. The decline in profits is in spite of a 9.5 rise in the firm's revenues for the period, which grew to 4.65 billion Yuan.

The company attributed this fall in profits to high cotton prices and increasing promotion and labour costs.

Likewise, Li Ning Co Ltd estimated its profits to have plummeted by seven to eight percent, with a six to seven percent drop in its revenues during 2011, which the company attributed to sluggish order flow and mounting inventories.

The third firm, Anta (China) Ltd, whose revenues grew by 11.5 percent to 1.7 billion Yuan, stated that its net profit decreased by 10 percent.

Analysing the situation, the firms are now developing an opinion that this is a time for adjustment, and that the future of sportswear industry is in product quality and branding, and not in the number of retail outlets or price levels.

According to experts, the time has elapsed when enterprises looked at multiplying their profits by boosting their retail presence. They say more retail outlets reduce profits per outlet and shoot up inventories.

They add that the Chinese sportswear industry is passing through a mid-life crisis stage, where it is difficult to distinguish between a brand's design and quality.

Peak last year added 582 new outlets, which took its total store count to 7,806. However, it is expected to bring this number down to 7,000 outlets this year.

Li Ning, which operated over 7,900 outlets by 2010-end, also plans to reduce costs and increase profits, by reducing staff and cutting expenses, excluding expenses related to promotion and research and development.

Fibre2fashion News Desk - China


Must ReadView All

Textiles | On 25th Sep 2017

SVP Group to build $300 mn spinning plant in Sohar

ShriVallabh Pittie Industries (SVP) Group, a diversified yarn...

Apparel/Garments | On 25th Sep 2017

Vietnam textile sector to gain if EU FTA gets ratified

Experts feel the Vietnam-European Union (EU) free trade agreement...

Courtesy: Business Wire

Textiles | On 25th Sep 2017

Invista to use ADN technology at joint project in France

Invista, a leading producer of chemical intermediates, polymers, and...

Interviews View All

Nuno Venda
ROQ

‘There has been an increase in demand for water based inks, rather than...

Evelyne Cholet
UCMTF

‘France had a reputation of being big in new ideas, but poor in marketing...

Sanjay Yagnik
Maa Tex Speciality

‘We suggest reducing dosage of sizing chemicals to reduce sludge...

Silke Brand-Kirsch
Schlegel und Partner

Silke Brand-Kirsch, executive partner of Schlegel und Partner, a leading...

Eamonn Tighe
Nature Works LLC

Eamonn Tighe, Fibres and Nonwovens - Business Development Manager of...

Kevin Nelson
TissueGen

Kevin Nelson, Chief Scientific Officer, TissueGen discusses the growing...

Judy Frater
Somaiya Kala Vidya

Among the many honours showered on Frater, including Fulbright and Ford...

Yash P. Kotak
Bombay Hemp Company

One of the directors of Bombay Hemp Company, Yash P. Kotak, speaks to...

Sonam & Paras Modi
SVA

Sonam and Paras Modi's Sva Couture is synonymous with head-turning...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

September 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Active Poll

Do you see sustainability as a route to business growth?

Yes
74.5%
No
12.8%
Skip
12.8%

Total Votes: 47

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Active Poll

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes
61.7%
No
25.5%
Skip
12.8%

Total Votes: 47

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Active Poll

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes
87.2%
No
6.4%
Skip
6.4%

Total Votes: 47

Thanks for your valuable feedback. Claim your free latest sustainability e-book.

Active Poll

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes
70.2%
No
10.6%
Skip
19.1%

Total Votes: 47


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search