Stepping Into The Next Step Of Street Culture

Under the epidemic situation, masks have become the gold medal of all industries.

Not long ago, champion's parent company, Hanes brands, released its second quarter results. This American underwear and sportswear manufacturer owns champion, which we Chinese call champion, as well as DKNY and other brands.

Sales in the second quarter were $1.73 billion, down slightly from $1.76 billion in the same period last year, but profits increased in the second quarter.

Horizontally, in the first quarter of fiscal year 2020, Nike lost $790 million, equivalent to RMB 5.5 billion, but announced that it would make two large layoffs. Adidas was not much better. Its global sales volume in the first quarter decreased by 20% year-on-year, and its net profit decreased by 96%. The Chinese market alone lost nearly 2 billion yuan.

The main reason for the growth of Hanes brands is that the company, which originally made underwear and sportswear, has shifted its production line to personal protective equipment such as masks and protective clothing.

In the second quarter, Hanes brands sold $752 million worth of personal protective equipment to governments, large organizations, other businesses and consumers around the world. This seems to cover up some truth. Even though champion's e-commerce business has soared by 200%, it still has many problems.

"Growth" is not working

The epidemic situation in 2020 will bring changes and even restructuring to all industries.

As a whole, the revenue of the clothing industry as a whole has decreased by at least 400 billion yuan this year, and the market scale has shrunk by 15%. Both domestic and foreign big brands are inevitably listed, and it is frequently reported that they are relying on shop closures and layoffs to help themselves.

Even Nike said in its latest quarter (March may) that gross profit fell 49% and revenue lost $790 million. The main reason for the decline in performance was the closure of offline stores under the epidemic situation, and the shipment volume of wholesale business decreased by 50%.

Champion, which also has a motor gene, is also being tested by similar problems.

At the beginning of last year, champion's total number of stores in the Chinese market reached 41, and the whole process took more than a year.

At the end of March this year, bonds, bras n things, Sheridan and champion announced the closure of stores one after another, and its parent company Hanes brands announced the temporary closure of 1200 brand stores in the United States, Europe and Australia.

The global layout of Hanes brands, as soon as the East lights up, the West presses pause.

But unexpectedly, the old line can not go on.

Hanes brands became one of the first retailers to turn to mass production of masks.

In Hanes brands' second quarter earnings report, this shift in production direction has become the key to maintaining profit growth.

Many fashion companies and even luxury brands have invested in the production of epidemic prevention products. When LV, Prada and Burberry transformed their original clothing and handbag production lines into mask production lines, it seems that they are the only way to get through the crisis - they have the opportunity to win lucrative government contracts.

This means that the cost can be paid, the company can still ensure the normal operation of the supply chain during the shutdown process, and can pay the capital and employee wages.

Before that, hundreds of thousands of people had left their jobs in the clothing industry under the impact. Macy's laid off 125000 employees and gap laid off nearly 80000.

Hans brands is the relatively lucky one. Gerald W. Evans Jr., CEO of the company, said in a conference call with analysts that the annual scale of the non-medical mask business alone is likely to grow to $200 million to $300 million. Hanes brands produced large-scale household cotton masks, which were successfully used in the clothing industry during the epidemic.

Turn to street culture

The most familiar identity of Hanes brands is champion's parent company. Champion also contributes most of its revenue to the parent company.

After its establishment in 1901, it gradually owned a series of clothing brand combinations. Hanes, champion, Bali, etc., range from T-shirts to casual wear, sportswear and underwear, and socks.

In the public's impression, champion is mainly sportswear.

At the beginning of the brand, sweaters, T-shirts and socks were its main products. Later, with the training clothes provided for the University of Michigan sports team, they became popular through the campus strategy, and colleagues also made the brand have sports gene.

Then champion also tried to enter the field of professional sports in the United States. During this period, champion provided some teams of NBA and NFL with match clothes. It was not until it became the official sportswear sponsor of the Winter Olympics and Atlanta Olympic Games that champion really established the image of professional sports brand.

But in the United States, champion has always been positioned as a mass leisure sportswear. Frequent range, mainly in supermarkets. In Japan, roadside stalls can often see its figure. It also makes brands often associated with the impression of "cheap.".

Awareness of the path of the campaign soon developed.

In the professional sporting goods market, Nike, Adidas and other brands have occupied the top edge of the field. It's better to shift to fashion and street culture than to compete.

The trend of "Kanye" and "Kanye" brand has been set off. Street culture began to appear in product design.

Subsequently, in the Chinese market, top stream IP such as Wu Yifan, Yang Mi and Li Yuchun were exposed, as well as airport photos, which rapidly expanded champion's brand awareness and influence in China.

However, before the opening of 40 stores last year, champion's presence in the Chinese market only existed in the circle of friends purchasing on behalf of customers and the buyers' shops on Taobao. In the star effect and supply starvation state, greedy bad market.

Marketing antenna

In recent years, it is necessary for Li Ning to be a successful brand and to be able to brand successfully.

They have launched the joint brands of fashion, fashion, fashion, fashion, fashion, fashion, fashion, fashion and fashion. And the 17ss model with veteents has become the favorite of Chinese stars such as Yang Mi and Huang Zitao.

At the same time, the brand features of champion are no longer attached to the market, and the brand characteristics of champion are still retained. At the same time, it will not affect the inherent consumer groups, but also step into the vision of high consumer groups with the help of CO branding.

Champion has also demonstrated market insight more than once.

In addition to producing masks, seeking co branding and transforming design, champion also expanded its marketing reach into E-sports in 2018 in order to seize the most growth areas.

Dignitas, a professional team, has been officially sponsored by champion during the competition. Superdata, a data research firm, believes that at that time, the global market value of E-sports had reached $1.5 billion.

This cross-border March is undoubtedly to win a new generation of young people with consumption power through E-sports.

The growth of e-commerce is not enough

Another bright growth data in the financial report is champion's e-commerce business.

Sales of Hanes and brands accounted for about 70% of total sales in the second quarter. Champion's e-commerce business alone surged 200% in the quarter.

Gerald W. Evans Jr., chief executive officer, said, "in China, we see good growth in online business as well. I still believe that, over time, we will be able to achieve our goal of $3 billion. "

Prior to this, champion's global sales increased by 40% in fy2019, including a 22% increase in both international and domestic businesses in the fourth quarter. Such a strong double-digit growth has lasted for 10 quarters.

Under the influence of the epidemic situation, although the sales volume in the second quarter of 2020 will decrease, the e-commerce business is undoubtedly one of the important reasons to effectively control the decline within the range of US $30 million.

E-commerce online understands that champion's current operation team in mainland China is Belle's new business group. In fact, China's online business, including tmall, Jingdong, wechat app and other channels, is mainly in the first two.

It's more about the proportion of men's clothing in champion.

Compared with the past, champion has been able to appear in star photos, circle of friends and Taobao buyers' shops because it can't be bought. It can only be purchased on behalf of others. Now the offline sales stores set up in China, as well as the official men's wear and sports flagship stores opened in tmall, have enabled Chinese consumers to find more effective channels to purchase.

"E-commerce online" searches champion tmall's flagship store, with 20% off for 2 pieces and 75% off for 3 pieces. The flagship store was opened in June 2018, and the number of fans is 2.19 million.

Facing the continuous epidemic situation, the greater difficulty for champion lies in the further expansion of sales channels.

In view of the impact of the epidemic, Nike, Adidas and other brands are aware of the importance of online business, and announced to strengthen e-commerce and direct business.

E-commerce helped brands recover their losses and contributed to a very rapid growth in the post epidemic period: Anta's e-commerce growth rate exceeded 40%, and Nike's latest quarterly financial report showed that the e-commerce growth rate was 78%.

In 2010, adidas has opened its flagship stores with a discount of 2.85 million. Even skykey, who has taken the vertical segmentation field, began to discount and enter the live broadcasting room to recover his losses.

From the perspective of the time and rhythm of entering China, champion is backward, and the competitiveness of channel maturity is also slightly deficient. It seems that the growth of e-commerce is small, but the business base will rise naturally. Next, in the face of professional sports brand self-help behavior, how to maintain the existing share, has become a top priority.

If we can keep up with the strength of the market in terms of price and continue the momentum of e-commerce, champion's next step of embracing street culture may expand the audience.

After Li Yining, a real sports brand, can become the third one in China.