Nike price increase 5% -10% Consumers call "too expensive"

Sports brand high inventory, increasing cost pressures, and finally let the front-line brand can not stand up. The media reported that Nike will increase the price of its shoes and clothes by 5% to 10%. It is reported that this fall Nike will launch the most expensive 10th-generation LeBron basketball shoes so far, which is expected to be priced at 315 US dollars (about 10,000 yuan), and the retail price of its ninth generation of shoes is about 250 US dollars (about RMB 1590).

Nike's gross profit fell 6 quarters

However, only the Nike family may dare to directly claim price increases. Due to the over-stocking, the sports goods brands in the Mainland have used inventory discounts to clear inventory. During a visit to some shopping districts, reporters found that discounts on sporting goods such as Li Ning, Anta, Xtep, etc. were basically over 50%, while Nike and Adidas only had 20% discount on some seasonal products, or 20% off new products. The relevant person in charge of the Guangzhou Friendship Store told reporters that at the moment no notice has been received regarding Nike’s price increase.

Some industry analysts said that with Nike's rising raw material and transportation costs in the past two years, it has put pressure on its profit growth. The latest financial report shows that Nike's gross profit margin as of May 31 fell from 44.3% to 42.8%, which is the sixth consecutive year of decline. As the largest Chinese market for Nike’s second-largest market, sales also saw a fall in revenue during the quarter. Total sales revenue for products including footwear, clothing, and accessories was US$667 million, a 3.89-point drop from the third quarter. %.

Morgan Stanley's research report shows that in the fourth quarter of 2012, Nike's global future order growth slowed from 18% to 12%, especially in China's order growth from 20% to 2%. However, adidas, a direct adversary of Nike, had a very positive second-quarter 2012 performance. According to Adidas’ public data, Adidas’ sales in Greater China amounted to 732 million euros, a year-on-year increase of 19%. Adidas forecasts its annual net profit growth from the previous 12%-17% to 15%-17%.

Consumer: 2,000 yuan shoes are too expensive

Although Nike spokesperson Mary Remuzzi emphasized to the media, Nike is not blindly raising prices; "We are always trying to use new innovations and product performance to achieve the upgrade of our product line." However, as prices rise, consumers will eventually buy. Buying is debatable. Mr. Cheng, who was in his early thirties, was a professional sports editor, but when he heard the price of a pair of basketball shoes was 2,000 yuan, he still called "too expensive." "The average entry-level version of basketball shoes costs about 700~800 yuan. I learned that the superstar version of the basketball shoes is the most expensive price of about 1700~1800 yuan."

industry:

There has been no improvement in the recent market

This year's slowdown in the growth of the retail market has affected the speed of inventory removal in the sporting goods industry. Peak, 361 degrees, and Anta's net profit fell by 43.3%, 23%, and 17% respectively in the first half of this year. Only Xtep slightly rose by 0.3%. The reporter found out from its semi-annual report that it was expected that the sporting goods industry could suffer setbacks this year, and that the fastest turnaround would take place in the second half of the year.

Not only profits are under pressure, companies have given more preferential treatment to distribution channels. Recently, Xtep issued an announcement on the Hong Kong Stock Exchange stating that the Group needs a more flexible and attractive pricing strategy to take into account the current fierce competitive environment, in order to adjust the wholesale discount offered to distributors from 60% of the suggested retail price in 2012. It is 62%. Peak CEO Xu Zhihua said that the market has not seen any improvement in the near future. However, he remains optimistic about the long-term development of the industry. This is due to the urbanization of rural areas in China and changes in the way of life of the Chinese people leading to more people participating in sports activities and other basic factors. No change. Most sporting goods brands are actively cleaning up too much inventory, and it is expected that the inventory adjustment of the entire industry will still take some time to complete.