Inventory levels have improved in the Chinese sports market in the first quarter of this year, according to 361 Degrees, which estimates that comparable store sales for the brand's outlets have increased by about 1.8 percent for the period. This compares with a decline of 1.5 percent for the same period last year.
The group said that the inventory was relatively healthy at the end of March, at some 4.2 times the average monthly sales for this period. The average discount against the recommended retail price for the three months reached 30 percent.
361 Degrees pointed to particular improvement in the stores that have adopted its so-called three-in-one model, carrying the 361 Degrees sports, Innofashion and 361 Degrees Kids ranges.
The group's retail franchise network amounted to 7,047 stores at the end of the quarter, down by 252 stores, with an average size of 101 square meters. Most of the closures occurred in the north of the country and the company said that concentration would continue for the rest of the year.
On the other hand, the network of 361 Degrees Kids stores increased by 35 stores to 1,893 at the end of March, with an average size of just 41 square meters. Quarterly sales in 361 Degrees Kids stores advanced by 2.8 percent on a comparable basis for the quarter, led by higher volumes.
Another encouraging sign is that orders increased by 8 percent for the 361 Degrees brand at the group's 2014 winter trade fair, held in April. There was a stronger focus on sports categories, from basketball to running, outdoor, cross-training and lifestyle. The wholesale discount for the assortment was raised from 63 percent to 65 percent. Orders for the children's range climbed by 3 percent.
The fair also marked the launch of the One Way brand in China, under a joint-venture owned 70 percent by 361 Degrees. The Finnish brand scored strongly at the Sochi Olympics held earlier this year. The first One Way store operated by the Chinese company should be opened by the end of the year.
The board of 361 Degrees said that the improvement achieved in the quarter should be sustainable for the rest of 2014, and it was cautiously optimistic that it could be profitable for the full year.
