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 28th Jun 2017

GST and textiles industry: Analysis and opinion

The Goods and Services Tax (GST) is at long last all set to be rolled ...

Textiles | On 28th Jun 2017

India probing dumping of polyester yarn by China

Indian government is probing anti-dumping allegations against a...

(left to right) Rohit Munjal, Ashok  Shah, Rahul Mehta, Premal Udani, Rajesh Masand and Jayesh  Shah

Textiles | On 28th Jun 2017

CMAI to host 822 exhibitors at 65th National Garment Fair

The Clothing Manufacturers Association of India (CMAI) will host over ...

Interviews View All

Cyril Pereira
Reed Exhibitions India, organiser of Asian Machine Tool Exhibition 2016

'Major problem in the textile machinery manufacturing industry is the lack ...

Sachin Sharma
Gem Enviro Management Pvt Ltd

There are no significant differences between virgin yarn and PET recycled...

Nitin Soni
Dolphin Jingwei Machines

Taxation policies need to be made simpler

Urs Stalder
Sanitized AG

Urs Stalder, CEO, Sanitized AG, talks about the increasing use of hygiene...

Kai Poehler
Voith Paper GmbH & Co. KG

The glass mat industry is growing by five to eight per cent annually. Kai...

Eric Scholler
Groz-Beckert

The Indian market has huge potential in technical textiles, and by far,...

Ritu Kumar
Label Ritu Kumar

‘Classics will return’ "There are a lot of people wearing western clothes ...

Sanjukta Dutta
Sanjukta's Studio

<b>Sanjukta Dutta</b> creates unique garments by clubbing prints of...

Yash P. Kotak
Bombay Hemp Company

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

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

news category


Related Categories:
July 2017

July 2017

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

SUBSCRIBE


Browse Our Archives

GO


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