The profit of the bird’s profit continues to decline. Cooperation with Jingdong is difficult to break the performance dilemma

On November 3rd, recently, the company released the third quarter earnings report for 2018. The data shows that from January to September 2018, the company realized a total operating income of 2.302 billion yuan. The growth rate was basically the same as that of the same period of 2017; The net profit attributable to shareholders of listed companies was approximately 16.06 million yuan, a 89% drop from the same period last year.

According to the bird, the decline in net profit was mainly due to the increase in the cost of production factors such as raw materials and labor costs. The output of the independent bird brand of the bird was lower than that of the same period of last year, and the fixed manufacturing cost increased. The subsidy and commodity discount support policies were provided to the dealers. Instead of short-term financial support, the gross profit of the VIP bird brand was further diluted; the operation and R&D of the new brand led to management expenses and R&D expenses.

In addition, the data shows that during the reporting period, the number of VIP bird brand stores actually opened 437, closing 725. However, in the past two years, the noble birds have been facing the “closed shop tide”. In 2017, the VIP bird shares opened 503 new retail terminals, closed 879 retail terminals, and closed 376 nets, equivalent to closing a store on average less than one day. In the first quarter of 2018, the company opened 78 new retail terminals and closed 133 retail terminals.

And the net profit of the expensive bird has started to decline since 2016, and the decline in net profit in the middle of this year has once again expanded. In the middle of 2016, the net profit of the VIP bird fell 9.9% to 157 million yuan, and the non-net profit fell 1.12% to 157 million yuan. The 2017 interim financial report showed that the net profit of the VIP bird fell double-digit, and the net profit fell 17.26%. 129 million yuan, deducting non-net profit fell 32.5% to 106 million yuan. The noble birds have been under the pressure of declining performance year by year. This is the bitter fruit of the previous diversified investment, which led to the setback of diversified strategic transformation.

In January 2014, the VIP bird successfully listed on the Shanghai Stock Exchange and became the first sports brand in the A-share market. But what followed was the cold winter of the entire textile and garment industry. When the peers were clearing inventory and responding to the market demand for digital transformation and upgrading, the noble birds explored on the diversified path. In January 2015, the VIP bird of 240 million yuan invested in Tigers Sports; in July 2015, the VIP Bird Group invested 20 million euros in the Spanish football brokerage company The Best Of You Sports, S.A. Holding 30.77% of its equity; in June 2016, the VIP bird held a sports goods retailer, Hubei Jiezhi, with a holding of 803 million yuan, holding 50.01%. In order to diversify, the VIPs also try to cross the border into the field of sports insurance, and even include sports, e-sports, paid reading and other industries, but from the 2017 annual report, these diversified investments have failed to give the birds The performance has brought about a change, and even led to the sluggish main business and the cash flow crisis.

In order to save the performance, the noble bird had to narrow the diversity and return to the main business. In August this year, it sold 37% of Kangxisi Sports Management Co., Ltd. and 37% of Kangxisi Sports Consulting Co., Ltd. and 13.66% of Hupu Sports. In October, Guiren Bird also established a strategic partnership with Jingdong to jointly build an intelligent logistics platform for sports shoes and clothing, relying on Jingdong‘s artificial intelligence technology, intelligent logistics and warehousing and distribution system, hoping to improve the main business and re-energize sports shoes and clothing. business.

However, domestic sports shoe brands have already begun to develop E-Commerce channels. Taking Li Ning as an example, in 2016, its E-Commerce channel achieved revenue of 1.15 billion yuan, accounting for 14.3% of total operating revenue, compared with 610 million yuan in 2015. It has increased by 88.0%. The noble birds still in a state of decline in performance are not dominant. And if you want to develop your main business well, you must have big breakthroughs and innovations. Taking Anta as an example, through the innovation in design and brand image, and the comprehensive brand strategy layout, it has attracted more young consumers, and the net profit has been rising in the past five years.

In fact, for all companies, the diversified layout can only be based on the strength of the main business. If the main business is not good, blind diversification and cross-border transformation will inevitably drag down the performance. Although the return of the noble bird to the main business and the backing of the Jingdong platform, the crisis is still continuing, the profit revenue is declining, and the performance dilemma is still difficult to break.