361 Degrees International saw its revenues decline by 9.0 percent in 2020 to 5,126.9 million yuan renminbi (€664.0m-$742.9m). The Chinese sporting goods company’s attributable profit went down by 4.0 percent to RMB 415.1 million (€53.8m-$60.1m). The gross margin dropped by 2.4 percentage points to 37.9 percent, mainly due to higher raw material costs. Operating expenses were reduced as many sponsored events were canceled during the pandemic, but once lockdowns were lifted, the company increased advertising and promotion to boost sales. The operating margin inched up by 0.2 percentage points to 16.0 percent.
361° stepped up efforts in the development of branding, product and e-commerce. On June 21, it became the official partner of sports apparel for the 19th Asian Games in Hangzhou in 2022. It is also cooperating with brands such as PepsiCo, Minions and Pokémon to launch co-branded products, which have proved popular.
The group is actively developing new online channels such as Mini Programs and Micro Mall on WeChat, as well as live streaming on platforms such as Alipay Sports and Tmall, to strengthen consumer engagement.
361° said it made efforts to improve the efficiency of its e-commerce platform during the pandemic, partnering with investment funds to inject RMB 1.1 billion (€142.4m-$170.0m) in its development. However, revenues from e-commerce declined by 14 percent to RMB 791.5 million (€102.5m-$121.3m).
During the financial year, revenues from apparel declined by 2.8 percent to RMB 2,001.8 million (€259.3m-$306.8m). The average price fell by 18.1 percent and the number of units sold rose by 18.8 percent to 25.7 million pieces.
Sales of 361° footwear dropped by 12.8 percent to RMB 2,081.3 million (€269.5m-$319.0m), and the number of pairs delivered fell by 5.7 percent to 19.2 million. One of the highlights of the period was Q Elastic Pure, which received the Ispo Global Design Award in the Running Shoe Category in 2020.
International sales accounted for just 1.2 percent of revenues, down from 2.0 percent last year. Sales of accessories dropped by 47.3 percent to RMB 52.6 million (€6.8m-$8.1m), although their volume went up. Sales for the 361° Kids line fell by 6.7 percent to RMB 932.3 million (€142.9m-$120.7m). Other revenues fell by 32.3 percent to RMB 58.7 million (€7.6m-$9.0m).
The company closed under-performing stores, cutting the number of 361° Kids stores from 1,922 at the end of 2019 to 1,703 on Dec. 31, 2020. The company also reduced the number of regular 361° stores in China to 5,165 from 5,519.
Looking at 2021, 361° expects that the sports industry will be recovering at a faster pace while shifting toward higher-quality levels. The company will focus on enhancing both product value and brand influence.