Bags / Shoes & Accessories

Sportswear retailer Taobo International Holdings Co., Ltd. recently released its annual results announcement. For the year ended February 28, 2022, Taobo recorded a revenue of RMB 31.877 billion, a decrease of 11.5% over the same period of the previous year; of which the operating profit was 34.3% 100 million yuan, a year-on-year decrease of 14.0%. Profit attributable to equity holders of the company was recorded at RMB 2.447 billion, a year-on-year decrease of 11.7%.

From the breakdown table, the main brands Nike and Adidas have revenue of 27.569 billion yuan, accounting for 86.5% of the total revenue; other brands including Puma, Converse, Vans, ASICS, Skechers, etc. have revenue of 4.005 billion yuan, 12.6% of total revenue. At the same time, the table also discloses the revenue decline rate of subdivided brands. The main brand decreased by 12.3% year-on-year, and other brands decreased by 6.1%. The announcement stated that the decline in revenue has a greater relationship with the repeated epidemics that began in July last year, and the shortage of the international supply chain in the second half of the fiscal year also had an adverse impact on the retail business.

According to public information, Topbo International Holdings Limited and its subsidiaries are mainly engaged in the sale of sports shoes and apparel products and the lease of commercial premises for joint sales to other retailers. Its cooperative brand matrix has been continuously enriched, and currently it has covered 11 well-known international and domestic sports shoes and clothing brands, such as the top sportswear brands such as Nike and Adidas, as well as trendy sports brands such as Puma, Converse, Vans, etc. The domestic brand Li Ning also this year. Cooperate with Topsports.

The rich partners have kept Taobo from losing money, but it has not driven Taobo's revenue to rise all the way, which may also be related to the deceleration of top brands in the domestic market.

According to the daily economic news, Nike recently announced its 2022 fiscal year financial report. The performance of the Greater China region accelerated to decline, and the annual revenue fell by 9% year-on-year. From the fourth fiscal quarter alone, the revenue fell by 19% year-on-year. The resale market is still hard to find, but the more important retail market is hard to arouse the enthusiasm of consumers. And Adidas's situation is not good, and like Nike, revenue has declined for three consecutive quarters. Although the financial report attributed the decline to the impact of the epidemic, domestic sports brands that were also affected did not experience a 10-30% decline. Taking Anta and Li Ning as examples, the first quarter of 2022 will show a mid-to-high-end growth trend.

In the short term, the pattern of competition between the two giants in the sports field will not be reversed rapidly, but the rising domestic brands will not disappoint the consumer market and seize market share. They are eager to try.

For a retail group like Topbo, to maintain the growth momentum, not only need to enrich the brand matrix and add new blood, but also continue to tap market potential and opportunities, and achieve greater efficiency in dynamic inventory management.

Taobo pointed out that the structural upgrade of directly-operated physical stores of "optimization + optimization" is still the core focus of the year, and the upgrading and transformation of high-potential stores and the continuous closure of low-yield and loss-making stores will be further implemented. Data shows that as of February 28, 2022, Taobo has a network of 7,695 directly-operated stores.

During the same period, Topsports announced the first quarter of the 2022/23 financial year, and the total sales of retail and wholesale business recorded a high year-on-year decline of 20-30%. As of May 31, 2022, the gross sales area of directly-operated stores decreased by 2.0% from the end of the previous quarter and increased by 2.8% from the same period last year.