ON Run, a heavy warehouse in China, opened 10 directly operated stores in China within a year
白云追月素
发表于 2024-3-14 19:35:53
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According to the latest 2023 financial report released by Swiss sports shoe manufacturer ON Holding AG, as of December 31, 2023, ON Holding achieved a year-on-year increase of 46.6% in net sales at actual exchange rates to 1.79 billion Swiss francs (approximately 14.628 billion RMB) and a net profit of 79.6 million Swiss francs (approximately 650 million RMB), an increase of 37.9% compared to the same period in the 2022 fiscal year. The adjusted pre tax profit margin of ON Run is 15.5%.
In 2023, the gross profit margin of ON Run also further increased, from 56% in 2022 to 59.6%. In the fourth quarter of 2023, ON's gross profit margin rose to 60.4%, setting a record high gross profit margin.
ON Encore stated in a media statement that the brand "achieved strong full year performance results in 2023, greatly exceeding expectations at the beginning of the year." ON Encore predicts that brand sales will increase by at least 30% year-on-year in 2024, gross profit margin will rise to around 60%, and adjusted pre tax profit margin will be between 16.0% and 16.5%.
On the day of the financial report release on March 12th, ON's stock price briefly declined at the beginning of the morning market and quickly rebounded. The closing price of the day was $30.64, slightly higher than the opening price. On March 13th, ON's stock price further rose to $33.28.
In the past year, the stock price of ON Sportage has risen by 41% compared to the previous year, surpassing the gains of established sports shoe manufacturers such as Nike, Adidas, and Puma. Overall, ON's financial performance for two consecutive years still gives confidence to the capital market.
The American market, dominated by the United States, remains the largest regional market for ON Amperex, followed by the European, Middle Eastern, and African markets. According to the financial report, ON Encore achieved a year-on-year increase of 29.2% in net sales in the European, Central and African sectors and the American sector, respectively, to 489 million Swiss francs and 52.2% to 1.162 billion Swiss francs, with revenue accounting for 64.9% and 27.2%, respectively.
However, the Asia Pacific market where China is located is currently the fastest-growing regional market for ON Run. In 2023, ON's Asia Pacific division achieved a year-on-year revenue increase of 75.9% to 141 million Swiss francs. This is mainly due to ON's rapid expansion in the Chinese market.
As of the end of 2023, ON Angpao has opened a total of 22 directly operated stores in shopping malls in China. However, ON Angpao entered the Chinese market in 2018 and had only 12 stores by the end of 2022. In the past year, it has opened 10 new stores, indicating its clear intention to accelerate its layout in the Chinese market.
At the previous performance exchange meeting, ON Envision had already clearly stated its intention to expand its coverage in the Chinese market in the next three years, with plans to increase the sales share in the Chinese market to 10%. According to the 2023 financial report, the net sales of the Asia Pacific region where ON Run China is located only accounted for 7.9% of the global market.
In order to achieve rapid growth in emerging markets, ON Encore has adopted a strategy of significantly transitioning to the DTC direct sales model - which is also a necessary path for many brands that have completed the initial accumulation in the first stage to expand into the global market. Direct sales channels help retailers strengthen their control over the brand and contribute to the construction of brand image.
In the early stages of its establishment, ON Encore established a strong retail network by collaborating with distributors and running shoe specialty stores in the European and North American markets. ON Run has also successfully entered the US market through this channel strategy, establishing a competitive edge against professional running shoe brands such as Nike, New Balance, Brooks Brooks, and Arthur's ASICS. The mature consumer market in the United States, with well-known local agents and professional buyer retailers, makes wholesale strategies quite effective in the US market.
But the situation is different in the Chinese market, where opening a direct store is almost the key for all emerging brands to establish a brand in the Chinese market and achieve rapid expansion of brand awareness. That's also why ON has only been in the Chinese market for six years, but China is already the single market where brands have the most stores in the world. In other regions, ON Run currently only has 10 retail stores, including 5 in North America and 4 in the European, Central and African markets.
In addition to opening brand direct stores, ON Ampai also focuses on developing e-commerce channels. At the same time, ON Angpao's screening of dealer partners has become more stringent. In Germany, Austria, and Switzerland, ON Amperex has stopped collaborating with approximately 200 retail partners. Bloomberg News quoted Martin Hoffmann, the joint CEO of ON Amperex, as saying that this has prompted customers to flow towards the brand's e-commerce channels.
As of the end of 2023, ON Envision achieved a year-on-year increase of 50.9% in DTC direct channel sales to 672 million Swiss francs, and a year-on-year increase of 44.2% in wholesale channel sales to 1.12 billion Swiss francs. DTC's direct sales channel contributed 37.5% of ON's net sales throughout the year, further increasing its share.
However, the success of channel strategy adjustments will continue to be tested. ON Angpao stated in its financial report that considering the strong performance of its wholesale business in the first quarter of 2023, after the loss of this part of the business, ON Angpao expects the sales share of DTC's direct channels to increase in the first quarter of 2024, achieving a growth rate of 26% at a fixed exchange rate.
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