After a slump in sales for the first half of this year, Asics Europe said it has embarked on a “transformation plan” to support its growth around Europe, the Middle East and Africa (EMEA) by 2020, with the expansion of its regional retail network from 26 to more than 100 stores.
Part of the transformation is intended to build closer relationships with consumers, with more physical and online stores, and more branded displays with retail partners. Asics Europe said that its own retailing and online sales currently make up about 16 percent of its sales and the target is to raise that share to about 30 percent, including space managed by Asics in 400 locations owned by key retail partners and partner programs online.
Another target is to reinforce partnerships with key retail clients, serving them more rapidly and efficiently, with fully integrated teams including their own sales, marketing and merchandising specialists.
A few days before Asics Europe announced its transformation plan, Sports Direct International (SDI) boasted that it had struck a partnership with Asics, as part of the retailer's efforts to reinforce relationships with leading brands and to raise the profile of its stores. Focusing on the U.K. so far, the partnership calls for Asics to manage space in the more upmarket Sports Direct stores, and it intends to develop similar programs with its largest strategic accounts in Europe.
With support from the group's global digital division in Boston, Asics Europe wants to invest in digital marketing capabilities, to make sure its brand presentation is fully harmonized across all digital channels.
More resources will also be invested to significantly increase the company's focus on emerging markets, from Russia to the Middle East and South Africa. The same applies for the group's lifestyle product ranges, which will get extra resources under the transformation plan to make sure the company delivers across its performance and more fashion-oriented categories.
While the plan calls for a significant re-allocation of resources, Asics Europe said it should not entail any structural changes. It wants to bring in more resources around merchandising, digital development, business intelligence and the lifestyle market, but the overall headcount should remain the same.
The plans were unveiled last week as Asics opened its flagship store on Regent Street in London, almost diagonally across from a Nike store, in connection with the start of the World Athletics Championships in the British capital. With a surface of 840 square meters, the latest flagship is the group's largest concept store in the world. It is the first one to sell all of the group's brands - Asics, Asics Tiger, Onitsuka Tiger and Haglöfs, the Swedish outdoor brand owned by the Japanese group.
The London store features interactive touch screens and a robotic shoe delivery system, allowing customers to order products to be delivered to the shop floor. The store also includes four Motion ID areas, using sensors to capture posture and running styles so customers can receive better advice. It also features a complimentary juice bar and a DJ booth.
Asics opened a flagship store earlier this year in Berlin, on more than 500 square meters on the Kurfürstendamm, and more recently in Paris' Les Halles district. Another is scheduled to open in Milan in September, and several more are planned before the end of the year. The investments were described as part of an effort to upgrade brand presentation across the group's own retail outlets, shop-in-shops in partner stores and an improved online sales platform.
The business plan announced last week coincides with the launch of an updated brand identity and a global brand campaign. The logo is a more dynamic take on the Asics spiral, which was adopted in 1992, making use of the spiral in a standalone version and in three colors, from light blue to coral red and green, in order to signify the brand's more inclusive approach. A multi-million investment including outdoor advertising, the campaign revolves around the brand message “I move me,” intended to encourage people of all ages and abilities to take part in physical activity.
Asics Europe reported a sales drop of 8 percent for the first half, amounting to a decline of 7.6 percent in constant currencies. The company said that sales had been affected by its strategic decision to cut back on the distribution of some iconic footwear ranges. Its sales in the Nordics was affected by unfavorable market conditions in the spring.
Asics Corporation reported sales of 50,177 million yen (€389.9m-$457.7m) in Europe for the first half of this year, amounting to a drop of 10 percent in yen and 7.7 percent in constant currencies. The segment's income tumbled by 40.0 percent to ¥3,595 million (€27.9m-$32.8m), with a decline of 38.4 percent excluding exchange rate changes.
However, Asics Europe added that some of its recent investments in retailing were starting to pay off, and the group's forecast includes growth in EMEA for the full year. Asics Europe reported a sales rise of 15 percent in its own stores for the first half, up by 13 percent in reported terms. Apparel sales were up by 4 percent, including an uptick of 11 percent for running garments.
However, Asics Europe added that some of its recent investments in retailing were starting to pay off, with a sales rise of 15 percent in Asics Europe's own stores for the six months, up by 13 percent in reported terms. Apparel sales were up by 4 percent, including an uptick of 11 percent for running garments.
The results included a sales jump of 26 percent in Russia, where Asics has doubled its resources. The company opened an enlarged office with outstanding showroom facilities in Moscow, while making significant investments in marketing and brand presentation, improving its logistical set-up and its operations. Among other investments, Asics has become a partner for the Russian volleyball federation, it sponsors the Moscow marathon and extended its partnership with the wrestling federation, which should help to support double-digit growth in the country. The group further reported strong initial growth in the Middle East, after it established an office in Dubai to push sales in the region of the Gulf Cooperation Council.
