Chinese sports brands shuttered more than 3,000 retail stores altogether in 2012, compensating for their strong expansion in previous years and feeling the pinch from the growing competition from the international sports brands. Li Ning and Peak Sports closed down about 1,200 and 1,000 doors, respectively. China Dongxiang shut 569 Kappa stores. Anta Sports and 361 Degrees closed 110 and 96 stores, respectively, according to local reports.
On the other hand, the low-priced Xidelong brand added 297 new points of sale through its distributors and retail partners in the past year, although its holding company, Exceed, has been reporting major drops in sales and margins. The company has not been investing directly in its retail network, and it has concentrated mostly on second- and third-tier cities, where the competition with the international brands is less strong.
An official of Erke, another major Chinese player in the market, said it has also reduced the number of its stores in the country, without giving any specific figures, but he said that his company was seeing this as an effort to harmonize its retail channel, closing smaller and underperforming stores and opening bigger ones. Erke's parent company, HongXing, has delayed the publication of its financial results for some time.
Meanwhile Belle International, which operates thousands of single-brand stores for foreign sports brands such as Nike, Adidas, Kappa, Puma and Converse, saw its share price fall by 16.78 percent on Feb. 21, after admitting that its 2012 profit will be at the lower end of analysts' expectations. Analysts expect the group's profit to be between 4.29 billion yuan renminbi (€527.3m-$688.1m) and RMB4.85 billion (€596.2m-$778.0m) for the year ended Dec. 31. The company said that it expects full-year net profit to be “marginally higher” than the previous year but that it “will fall within the lower end” of analysts' estimates. Belle is expected to release its full-year financial results in March.
