Anta Enters The High-End Sporting Goods Market By Acquiring International Brands

The Anta Sports Products Limited (02020.HK, Anta sports), which has always been "never stop" as its brand slogan, will once again take the pace of capital operation, and intends to enter the high-end sporting goods market through the acquisition of international brands.

After the divestment of the Shanghai frontline of the main agent retail channel business, Anta sports speeded up the takeover operation with the international high-end brands.

"Retreat is for better progress!"

A close to Anta insider said, "this shows that Anta has completely abandoned the once very good agent retail channel business, returned to the main business and accelerated the acquisition of international high-end brands."

Streamlining

Earlier, Anta announced that its Shanghai frontline sporting goods Development Co., Ltd. (hereinafter referred to as the Shanghai frontline) and its Affiliated Companies would be sold to Jiangsu and Hesheng investment guarantee Development Co., Ltd. (hereinafter referred to as Jiangsu and Sheng) at a price of 187 million yuan.

Jiangsu Hesheng is an affiliate of Anta's agent in Jiangsu, Jiangsu.

Anta set up the Shanghai forward line and its Affiliated Companies in 2006 to represent Adidas, Reebok and Kappa's three international brand retail businesses. Jiangsu and Sheng are subsidiaries of Anta's agent in Jiangsu, Jiangsu.

So far, apart from 6 flagship stores to enhance brand image and popularity, Anta will completely withdraw from retail business.

At present, its sales channels are handled by 43 distributors, but these distributors have no equity relationship with Anta.

Anta said it would adopt a more focused business model in the future, focusing on brand management, production and wholesale business.

Prior to this, Anta had been very keen on the international brand retail business of Shanghai frontline agent, and thought that it could accumulate experience of high-end brand for Anta, and hoped to enter the one or two level high-end market with the help of retail channel construction.

In July 2007, at the beginning of its listing, Anta had planned to invest heavily in developing the business and increased the number of its stores from 170 to 230-250.

However, after less than a year, the retail environment has changed much more than Anta sports 06 years ago. The cost of business has gone up much more than expected, and competition has become more intense.

By the end of 2007, Anta's retail business had accumulated a total loss of 5 million 500 thousand yuan.

The decline in profit margins and business losses in the retail business of international brands have forced Anta sports as a listed company to start reconsidering from a financial point of view.

"This business is still profitable for others, but it is no match for a company as large as Anta."

Anta chief operating officer Lai Shixian said.

Double brands?

As the Shanghai forward is sold, Anta's original investment in this business will change its uses.

Lai Shixian also said that the money will be used to acquire or operate international sportswear brands.

At the same time, he said he would not buy popular brands, and Anta would go up.

Anta positioning is still in the middle end market, but the middle price can not cover all markets, and Anta can not sell very expensive.

Lai Shixian said.

At present, some foreign sports apparel brands with good technical content and brand influence have considerable market share in the international or professional market, but they have repeatedly crashed into the Chinese market. This provides an opportunity for Anta to develop high-end market.

"Mainly because they rely solely on a single distribution agency, lacking strong partners in China."

Sha Yifeng, general manager of former sharp consulting, thinks.

Anta sports is familiar with the Chinese market, and has good supply chain management, which can reduce the cost of raw material supply, and at the same time, there are many channel resources.

This provides an important capital for its cooperation with international brands, and it is obviously more cost-effective to build new brands than to spend two or three hundred million of its own brand and acquire influential international brands in the Chinese market.

A few days ago, Anta sports talked with several subjects, but so far no actual agreement has been reached.

"Takeover may take a long time, and it may soon come to an end."

Lai Shixian said.

Anta sports will adopt two ways to manage international brands, one is to buy the latter's trademark ownership in Greater China, the two is to establish a joint venture with the latter, the international brand is invested in R & D capability and brand, Anta sports is cash holding.

However, whether the future sales of international brands still continue to use Anta sports sales channels, Lai Shixian said that there will be different considerations in different regions, and the possibility of opening new channels will not be excluded.

"However, it is hard to say what kind of impact it will have on Anta's brand image after the operation of international brands."

Shai Feng said.