According to the news on March 1, recently, the clothing fashion brand champion was listed by the parent company**.
According to a number of ** reports, the first round of bidding for champion closed on February 21, with a starting price of 1.4 billion US dollars (about 10.1 billion yuan).
Champion has also gone through several ** in history, and the main reason is that the parent company's operation and strategy have changed, and the business has been split so that the business can be focused and more funds can be replenished. Footwear and clothing analyst Ma Gang analyzed to reporters on February 29.
The picture is from champion's official Weibo.
Sales declined for the seventh consecutive quarter.
The parent company has a high debt ratio.
The reporter noticed that as early as September 2023, the possibility of champion being considered** has appeared on the official website of the parent company Hanesbrands. According to the news released on the official website of Hengshi in September last year, the board of directors and the senior management team of Hengshi are conducting a strategic evaluation of the champion business with the assistance of financial and legal advisors. The Board of Directors will consider a range of options, including ** or other strategic transactions.
Recently, according to ** reports, Champion has been listed**, Hengshi has set a bid price of $1.4 billion for the brand, the first round of bidding has closed on February 21, potential buyers include Forever 21 parent company Authentic Brands Group (ABG), Dutch jeans brand G-Star Raw parent company WHP Global, and strategic player G-IIII Apparel.
The trendy brand that was all the rage before is now listed**, which may be related to its continuous decline in performance and the high asset-liability ratio of its parent company Hengshi.
Jiang Han, a senior researcher at Pangu Think Tank, told reporters that the champion brand was **, first of all, its sales decline for seven consecutive quarters shows that the brand is facing the challenge of weak market demand, especially in the US market. This weakness in demand can be caused by factors such as changing consumer preferences, increased competition, or insufficient product updates for the brand itself.
Secondly, the decline in sales may have a negative impact on the overall financial performance of Hengshi, forcing the company to consider non-core assets to optimize resource allocation and improve profitability.
According to Hengshi's 2023 financial report, champion's sales in the global market in the fourth quarter of 2023 fell by 23% year-on-year, of which sales in the United States market fell by 30% and sales in the international market fell by 14%.
It is worth noting that Champion's sales have declined for 7 consecutive quarters.
In terms of liabilities, at the end of 2023, Hengshi's asset-liability ratio was 9257%, with net debt of $3.1 billion.
Hengshi also said in its earnings report that the company expects to repay more than $300 million in debt in 2024.
From being all the rage to being the first *** to close.
Champion is struggling to move up in the Chinese market.
Red Star Capital Bureau learned that Champion entered China in 2015 and made a name for itself in the Chinese market by virtue of its co-branding with trendy brands and celebrity outfit promotion.
In 2018, Champion opened China's first brand in Sanlitun, Beijing, when it first opened, queuing and store flow restrictions were the norm.
In 2019, Champion also introduced a second distributor, Belle International, in the Chinese market to accelerate the expansion of physical stores.
However, in recent years, in addition to the unsatisfactory development of the US market, Champion's business in the Chinese market has also had problems. According to Champion's former distributor Yongjia Group (03322In 2022 and the first half of 2023, the operating loss of its champion business was about HK$52 million and HK$34 million, respectively.
Champion's Beijing Sanlitun*** also closed in late 2022.
In October 2023, Yongjia Group will distribute the right to Belle International's **champion.
Champion entered the Chinese market and made a popular fashion brand through a large number of online and offline sales, and once the freshness of Chinese users passed, there was no future. At the same time, there are many copycat products in the Chinese market, and the impact on the brand is still very large. Cheng Weixiong, founder of Shanghai Liangqi Brand Management and analyst of the footwear and apparel industry, said.
In May 2021, Champion issued a statement on its official WeChat*** saying that many Champion stores have entered major stores in China, but many of them have not obtained brand authorization to open stores in China.
Screenshot from champion's official WeChat***
However, after Belle International was fully responsible for the distribution of Champion China, the financial report showed that Champion achieved sales growth in the Chinese market in the fourth quarter of 2023.
Ma Gang, a footwear and apparel analyst, believes that overseas markets and Chinese marketing and operation models are different, and the competitive landscape of the market is also different. The competition in the overseas market is more intense, and the domestic market operation strategy itself has avoided the most competitive ** belt, and the opening of stores to the core commercial street has also gained a lot of first-class customers, which has made the performance of champion China gain good benefits.
*: Red Star News.