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SBD Global/December 3, 2012/Finance

Major Chinese Brands Discounting Olympic Products After Building Up Excess Since '08

Six major Chinese sports brands are offering discounts of up to 80% off original retail prices "in a desperate attempt to unload excess inventory," according to WANT CHINA TIMES. The clearance sales mainly stem from "excess inventory built up since the Beijing Olympics in '08." In the first half of the year, 42 Chinese clothing enterprises collectively held inventory amounting to 48.3B yuan ($7.8B), of which 3.72B yuan ($597M) "comes from top domestic brands" such as Li Ning, Anta, 361 Degrees, Peak Sports Products and Xtep. To clear stock, Li Ning has held numerous sales since last July, selling products at 60%-70% off the original price for 10 consecutive days in first-tier Chinese cities such as Wuhan and Qingdao. Peak "has been the fastest builder of inventory among the major sports brands," having increased its excess stock by almost 26% to 529M yuan ($85M) in the first half of the year alone. Of the six major brands, "only Xtep has maintained a profit for the first six months of '12, with the performance of the other five brands dipping between 9% and 29%" (WANT CHINA TIMES, 11/29).
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