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Chinese sportswear industry continues to perform poorly
13
Apr '13
The poor performance of the sportswear industry in China has continued in 2013. Nike retail stores sales in China were hit during second half of last year due to decline in demand. In the first quarter of 2013, the company’s income declined by 12.09 percent year-on-year to US$ 567 million. The number of new orders too fell by five percent in Greater China.
 
Although Nike’s operating income amounted to US$ 572 million in January-March 2013, up eight percent year-on-year, the growth rate was slightly lower compared to the corresponding period of previous year.
 
In comparison, the performance of domestic brands was even poor. According to the annual report of Peak Sport Products Company Ltd., the company realized a net profit of 310 million yuan in 2012, down 60 percent year-on-year, the lowest in five years.
 
Anta earned a net profit of 1.359 billion yuan in 2012, down 21.5 percent year-on-year. The decline in net profit is the first since the company got listed five years ago. From 2008 to 2011, Anta had maintained rapid growth and the company’s turnover doubled from 4.627 billion yuan to 8.904 billion yuan during the period.
 
Another sportswear firm Li Ning also reported huge loss in 2012.
 
The order situation for sports brands is also not optimistic in the first half of 2013 and orders with listed companies like Peak, Anta and Xtep have generally dipped up to 30 percent.
 
Orders with Xtep International have fallen by 15-20 percent during the second quarter of current year. Total orders of Peak for the second quarter have declined by 2-3 percent, while total order value of Anta for the first half decreased by 15-25 percent year-on-year.
 
Industry analysts expect some improvement in the situation during the second half of 2013, but overall they do not foresee a drastic improvement in 2013 net profits.
 

Fibre2fashion News Desk - China

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