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Change in strategy imminent at China's sportswear brands

13
Aug '12
In recent years, the performance of sportswear brands in China has not been good, especially after the end of the golden period of 2000-2009.
 
After showing a 65 percent decline in Li Ning’s performance last year, the company’s Chief Executive Officer Zhang Zhiyong resigned this year.
 
Similarly, owing to the general discount offered by 361 Degrees in retail market, the company’s investment rating was downgraded by Merrill Lynch last month. Merill Lynch said the sales and profitability of 361 Degrees would not be very optimistic during the next six to nine months.
 
Moreover, foreign brands like Nike and Adidas are also going through troubled times in China. Adidas has already announced its decision to close its only sportswear making factory in China. It is also likely that the company may end its existing cooperation with 300 Chinese OEM factories.
 
It seems that changes in strategy are imminent at China’s sportswear brands in view of the dramatically rising cost of labour and intensified competition in the industry.
 

Fibre2fashion News Desk - China


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