Sportswear brands hope for Brazil sales bounce

Shoppers visit a Peak sportswear store in Nanjing, Jiangsu province.[Photo / Provided to China Daily]

First-quarter sales figures indicate that domestic sportswear brands are showing signs of recovery, and companies expect further growth this summer to come from the 2014 FIFA World Cup.

A group of domestic athletic apparel manufacturers announced first-quarter sales and the scale of orders in the fourth quarter, both of which have witnessed an increase.

Peak Sport Products Co Ltd, one of the main players in the sportswear industry, which held its sales fair for the fourth quarter in April, said fourth-quarter sales rose between 10 and 20 percent compared with the same period of the previous year.

Orders have increased for three quarters in a row since Peak Sport resumed publicizing its orders result in November last year, according to the company.

A fraction of Peak stores reported single-digit growth in same-store sales in the first three months compared with the previous year. Those results were attributed to a decrease in discounts and the release of several popular products.

Peak Sport reported an annual revenue of 2.6 billion yuan ($420 million) in 2013, in which the figure generated in the last half registered a growth of 22.8 percent compared with that of the first half, according to its annual financial report.

Another sportswear company, 361 Degrees International Ltd, announced 1.8 percent same-store growth in the first quarter year-on-year.

But, the positive effects expected to be brought by the World Cup are quite limited, analysts said.

"The game's effect in boosting sales of sportswear products would be much less than has been thought, because football-related sporting goods make up only a small portion of the whole market," said Zhang Qing, CEO of Beijing Key Solution Sports Consulting Co.

He added that some domestic sportswear makers would exhibit recovery in the year's second half while some would need a longer period to climb out of their slump.

Over the past two years, Chinese sportswear companies have been plagued by high inventory, lack of innovation and rising competition from fast-fashion brands and e-commerce platforms.

To bounce back, a number of sportswear companies, such as Li Ning Co, have changed the way they do business. Signs of Li Ning's gradual recovery come from a series of efforts, including optimizing sales networks and shutting down stores with low performance.