The Chinese sporting goods industry had experienced a downward process before 2014, with large numbers of stores shut down and company performances declined generally. Nevertheless, the situation started to get better in 2014 generally. Peak is among the companies that saw improvements.
This month, as a public listed company, Peak published a report of recent business performance in China. The report shows that the gross amount of the third quarter’s orders of 2015 (calculated according to whole sale prices) increased 10 percent to 20 percent compared to the same period in 2014, which is the six quarter in a row that saw such growth. Among the products, shoes had particularly higher increase than apparels. Just a few years ago, for example, in 2012 and 2013, such comparisons generally showed declines.
In terms of sales, some stores had low single digit growth in the last quarter of 2014 compared to the same period the year before. Up to December 31, 2014, the number of authorized stores in China was 6,004, eight less than the end of 2013. The decline was less severe than the past few years, when there were commonly around 1000 stores closed each year.
It is reported by other sources that in the first half of 2014, Peak’s operation revenue and net profits both had high growth. This also applies to Anta, another leading Chinese sporting goods brand.
Xu Zhihua, chief director of Peak, contributed the continuous growth in products orders to inner adjustments during this period and good social environment. In the second half of 2014, Chinese Government released policies to support the development of sports industry and sports consumption within the country, which is likely to stimulate high demands for sporting goods. He said this is a very advantageous for Peak.
“As more and more people start to like sports and do exercises, the demand for professional sporting kits would increase too. The new policy is going to further drive public sports development and the sporting goods market.” He said, “In the future, the public preferred sports such as basketball and jogging will be the focus of our sales.”
Source: Eastmoney, Qianlong, Finet.