Columbia2018 Net Profit Rose 155%, The Chinese Market Was Significantly Warmer.

Recently, the US outdoor sports brand Columbia released 2018 earnings report, 2018 sales increased by 14% to 2 billion 802 million U.S. dollars. Operating profit increased 33% to 351 million dollars, net profit rose 155% to 268 million dollars, a loss of 7 million 100 thousand US dollars in the same period last year. Whether the overall sales volume, operating profit and net profit, the three core indicators all set a record of the brand. However, inventory levels increased by 14% to US $522 million over the same period. The industry believes that the brand needs to pay more attention to channel expansion in the Chinese market.

China's market rebound

Judging from the sales situation in various regions, the North American market benefited from strong wholesale and direct sales, and the performance of the US market was outstanding. The fourth quarter sales in the US market increased by 20% to 589 million US dollars, occupying 64% of global sales, while sales in Canada increased by 21%.

Sales in Latin America and the Asia Pacific market increased 16% to $179 million 300 thousand in the fourth quarter. Among them, the business growth in Korea, Japan and China is relatively fast. In addition, sales in Europe, the Middle East and Africa increased by 12% over the same period last year.

It is worth mentioning that the financial statistics released by Columbia in the first 9 months of 2018 showed that sales in Japan and South Korea both increased, while the decline in China's market performance was the main factor that dragged down the region's performance.

Now, the annual data show that China's performance has improved significantly, and sales growth has been achieved. Columbia continues to maintain optimistic growth expectations for the next fiscal year. The company expects sales in 2019 to be between 2 billion 970 million and $3 billion 30 million, increasing from 6% to 8%.

In April 2018, Columbia announced that it would acquire 40% of the remaining shares of the joint venture with Swire resources. The company was established in January 2014 with an initial cooperation period of 20 years. According to the original agreement between the two sides, Swire resources can sell their holdings at any time after fifth years. Before the transaction was completed, Columbia had 60% of the shares, and Swire had 40% of its resources, and both sides shared profits and losses.

After the completion of the acquisition, Columbia will further control the development of the brand in the Chinese market, and will continue to expand the distribution network. However, Swire resources will still be the exclusive distributor of the brand in Hongkong and Macao. It is worth noting that in mid February 2019, John Soh officially became Vice President of the group and general manager of China market.

It is reported that John Soh has been a senior sales director in the Asia Pacific region of Lego group, and has served as Nike for 20 years, and has been a senior sales director in Greater China and Southeast Asia.

Tim Boyle, President and chief executive of Columbia, said: "John's long-term experience in Asia, especially in China's footwear and apparel industry, is well suited to the growing Chinese market."

We will concentrate our efforts on integrating channels.

Tim Boyle expressed confidence in China. He believed that the market had high growth potential. According to 2017 earnings data, Latin America and Asia Pacific (LAAP), including China, recorded only 2% growth, becoming the slowest region for sales growth. Columbia said that the future will focus on changing the way of distribution in the Chinese market to stimulate sales.

The Chinese Commercial Daily reporter asked the relevant salesmen of the brand flagship store of an electronic business platform. They thought that the brand shoes and clothing generally reflected the good quality, but the clothing version was too large and not suitable for Asian stature, so the size problem resulted in a lot of goods returning. Besides, the price of the brand is not cheap, and the sales volume is better when there are preferential activities on the electronic business platform.

An industry insider who does not want to be named thinks that the outdoor brands need to pay more attention to the marketing and promotion in the Chinese market. At present, outdoor clothing attracts more and more middle-aged and elderly people to wear, and more efforts should be made to attract more consumers of different ages. The design of products should also highlight some fashion sense. In addition, online channels need to increase investment. At present, all garment brands are expanding all channels, and competition in future channels will become more intense.