Rapid Development Of Local Sports Brands In The Third Quarter

In recent two months, Hong Kong stock and A share clothing segmentation market leaders have been "showing their muscles" through mergers and acquisitions.

(002563.SZ)

Through this acquisition,

And Semir structure launched large-scale mergers and acquisitions, to create a sense of the market, the major clothing sub leader will continue to take off through mergers and acquisitions, and chasing their growth space will be further compressed.

In fact, such a hypothetical is not unreasonable, because when some large garment enterprises have been merged, other small and medium-sized clothing enterprises will not be able to find such a large target even if they have the conditions of merger and acquisition in the future.

Fortunately, there is no endogenous growth in mergers and acquisitions. For example, Lining (02331) in recent years is a benchmark to achieve rapid growth in performance through deep plowing of existing businesses.

In September 2018, the company held orders for orders in the second quarter of 2019, and achieved a low 10%-20% growth year by year.

In terms of the tag price, the Lining brand product orders of the franchisee at the order meeting (excluding Lining YOUNG) increased year by year for the twenty consecutive quarter.

The latest Lining sales point has been put into operation at the beginning of the same quarter in 2017. As of the third quarter of September 30, 2018, the sales volume of the same platform achieved a low 10%-20% growth year by year.

As far as channels are concerned, retail channels (direct operation) and wholesale (Franchised Distributors) channels have achieved year-on-year growth in the number of units respectively, while the virtual store business of e-commerce has been growing at an annual low 30%-40% level.

As of the third quarter of September 30, 2018, Lining sales point (excluding Lining YOUNG) grew by 10%-20% in the middle of the whole platform.

As for the channel, the offline channel (including retail and wholesale) has achieved 10%-20% growth in the middle period, of which retail channel has achieved 10%-20% mid growth and wholesale channel has achieved 10%-20% low segment growth; e-commerce virtual store business has achieved 30%-40% low segment growth.

The third quarter was mainly driven by the same store sales growth of more than 10%.

Retail sales grew by an annual increase of about 15%, and the growth rate accelerated significantly.

The reason why Lining can maintain a higher growth rate of same store sales is not due to the increase in the number of stores.

The announcement shows that as of September 30, 2018, the total number of Lining outlets in China (excluding Lining YOUNG) totaled 6345, a net increase of 78 from the end of the two quarter and a net increase of 83 in the first three quarters.

It can be seen that Lining's performance growth has got rid of the dependence on the number of stores a few years ago, instead of a breakthrough in the product side.

In the official flagship store of Lining Tmall, the company released the series of Wade shoes in recent years, the highest price is up to 1009 yuan (the same below), while Anta's latest Thompson series sneakers KT4 version of the pre-sale price of "only" is 808 yuan, which shows that Lining has been walking in the forefront of domestic sports brand in high-end products.

In terms of product sales, Lining came to the New York fashion week in February this year for a 899 yuan "Monkey King" sneaker, with a monthly sales volume of 2232, and a monthly contribution of more than 2 million yuan.

In addition to traditional businesses, Lining's new business, Lining YOUNG, has also shown the momentum of rapid growth.

According to Lining's announcement, as of September 30, 2018, the total number of sales outlets at Lining YOUNG in China totaled 677, representing a net increase of 46 over the previous quarter, and a net increase of 504 in the first three quarters (January 1, 2018, taking over 361 of authorized dealers' distributors and shops).

APP, Lining, noted that the number of sales points of the Lining YOUNG increased by 291.33% compared with 173 at the end of 2017.

The company has said that in the second half of this year, efforts will be made to develop children's wear and other sectors. The number of children's clothing stores at the end of this year is expected to reach 750.

From the industry perspective, China

Under the background of the release of the second child policy and the 80 and 90's young parents becoming the main consumers of children's wear, the children's wear industry has a good momentum of development.

According to Euromonitor data, the size of China's children's clothing market in 2017 was about 179 billion 600 million yuan, and 2012-2017 years CAGR was 11.1%, far higher than that of the clothing industry 6.2%.

Volume and price jointly drive children's clothing scale growth. In recent years, sales growth has been significantly improved, and prices have remained moderate.

Therefore, children's wear market has become the major market.

China's local sports brands are also pursuing new growth points in the field of children's shoes and clothing with Nike, Adidas and other foreign brands.

For example, in addition to its own brand Anta Kids, Anta bought high-end brand KingKow in October 2017. For example, China's trend (03818) core brand Kappa business increased by 10.7% in the first half of 2018, while its children's clothing business grew by 16.28% over the same period last year. For example, the 31st degree (01361) recently released three quarter operating data showed that the retail sales of 361 degree children's brand products in the third quarter of 2018 (at retail value) had a double-digit percentage increase compared with that in 2017.

To sum up,

Under the background of high boom, Lining's

Business is worth looking forward to, and combined with the success of the company's high-end products, even if Lining does not buy in the future, the company's future development potential is clear.