Domestic sport brands see growing performance in Q3 against traditional textile companies

Close to the disclosure deadline of the third quarterly report, listed companies released performance intensively recently. As of Oct 29, most listed textile and apparel enterprises have announced their third quarter business situation, with repeated spread of pandemic and economic downward pressure, the performance of traditional clothing brand was generally under pressure, the industry survival of the fittest situation intensified, while domestic sports brand performance has achieved counter-trend growth, showing a strong tenacity.

With weak clothing consumption, HLA Group showed its strong resilience. The revenue and net profit in the third quarter increased year-on-year, and  the market resources of traditional apparel industry were speeding up to the leading enterprises.

In addition to HLA Group, another clothing brand, SAINT ANGELO, also performed well in the third quarter. As an enterprise focusing on the suit field, it launched the "New Sports Suit Series" this year by analyzing the diversified demands of consumers for suits, leading the industry innovation and providing support for its performance growth.

The performance growth of Biemlfdlkk and Challenge was related to sports category. Among them, Biemlfdlkk is a leading enterprise of middle-and-high-end sports and leisure in China. Starting from golf clothing, the company's core positioning is that high-end male customers have high brand loyalty and strong consumption power, thus driving the company to realize counter-trend growth. In the era of the rise of sports brands, Challenge grasped the outdoor and sports functional clothing track to provide fabrics for many medium-and high-end sports brands at home and abroad.

Different from the bleak performance of traditional apparel enterprises, the performance of the four major domestic sports brands all realized counter-trend growth  in the third quarter of 2022. Under the upsurge of national fitness, the sports industry ushered in rapid development, driving the brand performance to be greatly improved.

In Aug 2021, the State Council issued the National Fitness Plan (2021-2025), which clearly stated that by 2025, 38.5% of people would regularly participate in physical exercise.

In Oct2021, the General Administration of Sport of China issued the "14th Five-Year Plan for Sports Development," encouraging the development of "Internet + Fitness" and "Internet of Things + Fitness" modes, increasing sports products and service resources, optimizing online and offline fitness interaction, and advancing family fitness scenes and online fitness activities.

In Jun 2022, the Sports Law of the People's Republic of China was revised, changing the title of the original Chapter II "Social Sports" to "National Fitness," specifying that China implements the national fitness strategy, constructs the public service system of national fitness, encourages and supports citizens to participate in fitness activities, and promotes the deep integration of national fitness and national health.

From the far-reaching national strategy to the life style benefiting thousands of people, in recent years, the public's awareness of fitness has been continuously strengthened, and the national fitness has been gradually integrated into the public life. Therefore, the long-term trend of sports brand performance remains unchanged. In the case of increasing downward pressure on the global economy and low consumer willingness to spend, the traditional apparel industry may still follow the law that the strong are always strong and the weak are always weak.