Sports Shoes Enterprises "Enclosure" Two Or Three Lines Of Urban Breakthrough Cost Dilemma

In March 23rd, international crude oil, rubber and other prices continued to rise, labor costs rose, under the increasing cost pressure.

The price increase of raw materials has put pressure on many sports shoes enterprises. Anta, 361 degree and other enterprises in the recent earnings report said that raising the sale price of footwear has become the main choice.

According to Anta's earnings report, the average selling price of Anta footwear and clothing products increased by 4% and 8.8% respectively in 2010, and the price of Anta footwear will also increase in 2011.

The 361 degree earnings report also showed that the average selling price of shoes increased by about 5.5% in the second half of 2010, and the average selling price will increase this year.

In addition, from the data of XTEP and PEAK's orders this year, the related products increased by 5% to 10% in 2011, driven by raw materials and manpower costs.

In fact, in addition to price increases, many shoe companies are also trying to avoid the risk of rising raw materials as much as possible.

The futures order system enabled PEAK to lock in raw material costs for a certain period of time.

"Locking costs are risky for enterprises, requiring high cash flow, but in the face of risks arising from rising costs, this is a very effective means of control."

Xu Zhida, deputy general manager of Peak Sport Products Co Limited, said that the strategy of locking costs led PEAK to maintain a cost advantage of about 5% lower than its peers last year.

With the increasingly fierce competition in the first tier cities, the vast two or three line cities and even the rural market have become the breakout place of Quanzhou sports brand.

According to data from XTEP orders, this year will focus on the two or three line market, and plans to increase 800 to 1000 new stores, mainly in Sichuan, Hunan, Anhui and Shandong provinces.

From the 958 new stores that Anta added last year, most of them are also concentrated in the two or three line market.

Another brand PEAK also focused on the two or three tier cities in 2011, and said that it would strengthen penetration of high growth potential areas and better grasp the opportunities brought about by urbanization and national wage increase.

In fact, in the development plan released by international sports giants Nike and Adidas, increasing the number of stores in the two or three line market is also the main goal in the next five years.

It can be predicted that after the first tier cities are relatively saturated, the competition of sports brands in the two or three tier cities has begun.

It is understood that, despite the fierce growth of raw materials in 2010, Anta's turnover still increased by 26.1% to 7 billion 408 million yuan, PEAK turnover grew 37.3% to 4 billion 249 million yuan, while 361 degrees footwear product turnover grew 18.1%; clothing products turnover increased 42% over the same period.

Most of the reasons for growth are attributed to the expansion of enterprises.

Data show that PEAK's sales outlets increased by 1018 in 2010 to 7224, while Anta's brand retail stores increased by 958 in 2010 to 7549, while in the second half of 2010, the number of adult clothing stores increased by 336 to 7263 in the second half of 2010.

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After the number of terminal stores has generally broken through the "7000" mark, it has become the next goal of Quanzhou sports brand to enter the "Wan Dian".

Anta's financial report shows that this year plans to increase the number of outlets to 1, while 361 degrees also proposes an annual increase of 600 to 800 stores and the goal of expanding the scale of stores to 1 million within 4 years.

"On the one hand, sports shoes and clothing are facing the most extensive population in China. Naturally, more store service consumers are needed. On the other hand, from cost control, the increase of sales volume depends on the increase of stores, and the increase of sales volume can reduce the purchase of raw materials correspondingly."

Industry analysts said.