Erke a quarter-year recession
Erke a quarter-year recession
2009, other major sporting goods brands to achieve an average annual growth of over 20% year on year.
In 2009, China's Li Ning, Anta, and special steps such as Olympic sports brands have achieved sales of more than 20% year on year growth, but, in the Singapore-listed Erke failed to so fortunate in 2010 still continued in the first quarter results for 2009 recession quarter revenues decreased by 13.5% year on year, gross profit decreased 31.9% year on year.
The industry believes that the reason Erke poor performance is due to expand too quickly after the listing is still digesting the bitter result, which led to the company's weak sales channel expansion.
Erke a quarterly show, as of March 31 this year, the company earnings for a quarter of 491 million yuan (RMB, same below), down 13.5%; gross profit 155 million yuan, down 31.9%.
In Erke all business units, higher gross margin, occupying an important position in the sports apparel revenue sales decline sharply. In the first quarter, Erke 157 million in revenue clothing, down 45.9%; although shoes and accessories revenue grew 18.2%, respectively, and 78.1%, still does not help, leading to overall revenue declined, overall gross margin from last year's 40.2% decline to the current 31.6%.
Erke quarter results continued the weakness since 2009. Annual Report 2009, disclosed Erke income decreased compared to 30.8% in 2008 to 20 billion in sports shoes, apparel, sports accessories in the income of the three segments were down by 40.2%, 8.3%, 68.2% In contrast, the other major sports brands to achieve the year 2009, average annual growth of more than 20%.
Decline of performance problems, Erke explained by the weakening of domestic demand, excess inventory of other dealers have led to Erke reduce the price of getting goods dealer to dealer inventory digestion.
Magang sporting goods market observers on the "First Financial Daily" said that this year of unusual weather in many areas a direct transition from winter to summer, each of the spring sporting goods sales severely affected, but should be able to maintain various about 10% year on year sales growth, he thinks Erke difficulties now facing the main sales channel is expanding weak.
According to the information Erke, by the end of 2009, Erke about 4,003 retail outlets, and by the end of 2008 the figure was 3,824, increased by only 179, compared to other major sporting goods brands frequently four-digit year network speed is lackluster start; the first quarter of this year, the new store just opened Erke 27, still less than the number of new stores in 2009 one-sixth.
Magang that Erke many provincial cities in the country set up self flagship store, which occupied a considerable part of the funds; and self-oriented thinking, but also slows down the enthusiasm of franchisees and speed shop, the door caused by slow sales of store expansion can not break through, this became the main reason for its poor performance.
Another analyst Lin Weiyue told reporters: "Erke listing in Singapore once blind expansion, dash too fast, some stores only the value of 100 million, with two million to 300 million won to the price , regardless of cost to expand the number of stores; also a lot of money into advertising, there have been some internal problems. "
Erke expected downturn in the 2010 situation will continue, will face many challenges, will continue in the ad such as belt-tightening strategies to reverse the trend.
Peak, CEO of Zhi-Hua Xu said the first quarter of this year, with the Olympic store sales growth of 15% of consumers of lifestyle changes on the demand for sports goods is still growing, he prefers the domestic sports goods market, as some brands unsatisfactory business performance issues, individual circumstances are different, difficult to evaluate.
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