The potential joint venture between Anta Sports Products and Descente emerged while the Chinese sports apparel and footwear brand reported a sales jump of 24.7 percent to 11,126 million renminbi (€1,543.5m-$1,702.4m) last year, with ample rises in profits.
The group pointed out that it became the first Chinese sports company to have attained annual sales of more than RMB 10 billion. It attributed the rise to Anta's clear positioning as a value-for-money brand with strong marketing assets, including its partnership with NBA China and the Chinese Olympic Committee. An endorsement deal signed with Klay Thompson from the Golden State Warriors led to the launch of his Anta shoe in China and in the U.S.
As previously reported, Anta has also made strong headway with its Play is All strategy in the Chinese football market, which started to draw much increased international interest last year. Among other wide-ranging grassroots investments, the company teamed up with Zheng Zhi, current captain of China's national football team.
Anta ended the year with 7,031 Anta stores, down by 591 stores as the company strove to consolidate its network with larger stores in more attractive locations. The company boasted that comparable sales of its Anta brand stores have been on the rise for 12 quarters in a row. They were up at a mid-single-digit rate for the last quarter and at a high single-digit rate for the year.
The group has been tightening its relationship with retail partners, by requesting that they adhere more strictly to Anta's guidelines and that they also share more information about their sell-through. In exchange, the group has been sharing more of its own information and market trends and figures gathered by its real-time monitoring system. Retailers were also asked to be more flexible in terms of reorders, in order to prevent inventory pile-ups.
About 65 percent of the assortment in the stores consists of orders packaged by the company, which is more than twice the proportion before Anta began to implement its retail strategy. The company also provides more training for its retail partners, along with various tools to improve sell-through.
Another part of the expansion came from Anta's strategy to diversify its business with Anta Kids sportswear, the Fila brand in mainland China and with investments in online sales. The group ended the year with 1,458 stores trading as Anta Kids, up from 1,228 the previous year. Children are a major target of its investment in football, which led to the launch of a range of football boots for children in the fourth quarter.
Fila's exposure in China has been enhanced by a partnership with Chris Evans and the opening of a flagship store in Hong Kong, while others were renovated. The company ended the year with 591 stores for Fila and another 50 Fila Kids stores opened last year in China, Hong Kong and Macao.
Anta's gross profit surged by 28.8 percent last year, resulting in a rise of 1.5 percentage points in the gross margin to 46.6 percent. The operating profit margin advanced by 1.6 percentage point to 24.2 percent. The company ended the year with profit attributable to shareholders of RMB 2,041 million (€283.2m-$312.3m), up by 20.0 percent.
Anta started the year with robust orders at its trade fair in January, up at a high single-digit rate including the Kids series. The company is gearing up for the Rio Olympics, where it should take advantage of its partnership with the COC and 24 of China's national teams.
Anta expects to end the year with 7,000 to 7,100 Anta stores, 1,700 to 1,800 Anta Kids stores and 650 to 700 Fila and Fila Kids stores. It also intends to support the growth of its online sales by offering more new online-exclusive products on popular online retailing platforms. Online sales currently make up a high single-digit percentage rate of its turnover and the company is targeting a double-digit rate this year.
