At the recently concluded Paris Olympics, ANTA Sports gained a lot of good reputation with the Chinese sports delegation's Olympic award gown. Now, it has submitted another outstanding performance report for the entire first half of the year. On August 27th, ANTA Sports released its semi annual report, and in the first half of this year, its revenue and net profit achieved double growth again.
However, as an important component of ANTA Sports, FILA's performance in the first half of this year was relatively average, with a year-on-year revenue growth rate of only 6.8% and a revenue share of 38.7%. From 2019 to 2023, FILA's revenue share has remained above 40%. The performance of FILA this time has once again sounded the voice of 'FILA stalling' in the market.
FILA's revenue growth rate drops to single digits
In the first half of this year, ANTA Sports achieved steady growth again, with revenue of 33.735 billion yuan, a year-on-year increase of 13.8%; Realize a net profit attributable to the parent company of 7.721 billion yuan, a significant increase of 62.6% year-on-year; Even after excluding the profit and loss of joint ventures and non cash accounting gains caused by Amer Sports' listing equity, its net profit still increased by 17% year-on-year to RMB 6.161 billion.
ANTA Sports is a multi brand sports equipment group, with brands including ANTA, FILA, DESCENTE, KOLON SPORT, MAIA ACTION, etc.
However, as a key component of ANTA Sports, FILA's performance in the first half of this year was not as impressive as before, with a year-on-year revenue growth rate of only 6.8%, lower than the 13.5% in the same period of 2023, and its revenue proportion dropped to 38.7%. From 2019 to 2023, FILA's revenue proportion was 43.5%, 49.1%, 44.2%, 40.1%, and 40.3%, respectively. The performance of FILA has once again sounded the voice of 'FILA stalling' in the market.
FILA is an Italian high-end sports brand. In 2009, ANTA Sports acquired the trademark usage rights and exclusive rights of FILA in Greater China, and in 2017, it also acquired the trademark operation rights in Singapore. In recent years, it has been playing an important role as the growth engine of ANTA Sports' performance. In 2019, ANTA Sports disclosed FILA's revenue for the first time in its financial report. That year, the brand achieved a revenue of 14.77 billion yuan, a year-on-year increase of 73.9%, far exceeding the growth rate of its main brand ANTA. In 2020 and 2021, FILA's revenue growth rates were 18.1% and 25.1% respectively, maintaining a relatively high growth rate. The turning point came in 2022, when FILA's revenue experienced a 1.4% decline. In 2023, although FILA's revenue resumed growth with a year-on-year growth rate of 16.6%, it was significantly lower than previous years.
FILA has three brands under its umbrella: FILA, FILA KIDS (FILA Kids), and FILA FUSION (FILA Trendy Brand). Regarding the slowdown in FILA's revenue, on August 29th, ANTA Sports responded to a reporter from Huaxia Times, stating that "FILA achieved high single digit growth overall in the first half of the year, outperforming the entire industry and other international brands of the same scale. Among them, FILA's main brand, which accounted for over 60%, still maintained double-digit growth in the first half of the year, leading the industry. Overall, the trend market growth in the first half of the year was relatively weak, and FILA's trend brand performance was relatively leading the industry; The children's market has entered stock competition, and the overall industry growth is relatively slow. FILA Children will continue to maintain its first place in the high-end children's clothing market in the future, and we are very confident
Has FILA reached the top yet
FILA is positioned as a high-end fashion and sports brand, with a revenue scale of 25.1 billion yuan in 2023. Cheng Weixiong, an independent analyst in the fashion industry and founder of Shanghai Liangqi Brand Management Co., Ltd., analyzed to a reporter from Huaxia Times that "the sports fashion track itself is relatively niche, and FILA has basically reached its maximum scale. It is difficult to achieve high growth again
At the same time, the current consumer environment is not friendly to FILA. Affected by macroeconomic factors, consumption downgrade has become the mainstream of market development. The entire consumer market environment will directly affect clothing consumption, "Yang Dayun, President of Uta International Brand Investment Management Co., Ltd., told our reporter.
In addition, FILA has also been impacted by similar brands. In recent years, with the changing consumer trend in the field of sports shoes and clothing, brands with obvious professional performance have become increasingly popular among consumers. Reflected at the company level is the rise of professional sports oriented brands such as Lululemon, Angpao, and Sokoni in recent years. According to the financial report, Lululemon's net income in Chinese Mainland has been growing by more than 30% from fiscal year 2021 (as of January 28, 2022) to fiscal year 2023 (as of January 28, 2024); In the first half of this fiscal year (six months ended July 28), revenue in China increased by nearly 40% year-on-year; In 2023, among the three major global markets, China's Asia Pacific region will have a year-on-year growth rate of over 70%, making it the fastest-growing region currently. Xtep International also stated in its 2024 interim report that Sokoni's revenue has made significant contributions to the professional sports division.
Regarding the current changes in sports shoe and apparel consumption, ANTA Sports also stated in its 2023 financial report that consumer demand for sports apparel is constantly refining and placing increasing emphasis on product functionality. In this context, ANTA Sports has increasingly strengthened FILA's professional sports attributes. In its 2024 interim report, ANTA Sports stated that FILA is committed to enhancing its brand attributes of "professional sports" and "fashion mindset". In terms of core category layout, FILA focuses on four major sports including tennis, golf, skiing, and outdoor activities.
Yang Dayun analyzed this to our reporter and believed that "because ANTA is taking the mass sports route, and there is demand in the high-end professional sports market, FILA's development and expansion in this field is the right path. However, as a once well-known international sports brand, FILA's success in the Chinese market is largely due to ANTA's strong sports expertise. However, the shrinking influence of the FILA brand in the international market will have some impact on its long-term development in the Chinese market
The baton of growth
Who has taken away the market space lost by FILA from its highest revenue share of 49.1% in 2020 to 38.7% now?
The main brand of ANTA Sports, ANTA, mainly follows the professional sports route for the masses. In the first half of this year, its revenue was 16.077 billion yuan, a year-on-year increase of 13.5%, accounting for 47.7% of the total revenue. From 2021 to 2023, the proportion of ANTA brand revenue will remain fluctuating around 48%. The proportion of income has not changed much relatively.
And other categories, including brands such as Desant and Kelon, are developing rapidly. In the first half of this year, excluding all other brands under ANTA Sports and FILA, the revenue was 4.602 billion yuan, a year-on-year increase of 41.8%, accounting for 13.6% of the total revenue, an increase of 2.7 percentage points compared to the same period last year. From 2021 to 2023, the year-on-year growth rates of revenue in this category were 51.1%, 26.1%, and 57.7%, respectively, with revenue proportions of 7.1%, 8.2%, and 11.1%, becoming a new performance growth point for ANTA Sports.
Both Desant and Kelon are positioned as high-end professional sports brands, with Desant focusing on golf, skiing, and triathlon, while Kelon mainly revolves around two outdoor scenes: camping and hiking. In addition, in the high-end professional sports segment, ANTA Sports is also constantly harvesting other new brands. In October 2023, ANTA Sports acquired the MAIA ACTION brand, a designer sportswear brand specifically designed for Asian women, which has established a certain market influence in the yoga category.
An official from ANTA Sports told our reporter that ANTA Sports' strategy of single focus, multi brand, and globalization helps us take care of different consumers with different brands, which can highlight and expand our advantages in this existing competitive market; ANTA continues to expand its market share in high tier cities and mass markets, while FILA maintains high-quality growth while maintaining healthy inventory and discounts, outperforming international brands.