Oil Price Increase and Sports Shoes Annual Report Expected 5%-10% Increase

After the Lunar New Year, Shanghai Natural Rubber** opened at 43480 yuan/ton, and the reference price for natural rubber spot market at that time was: Yunnan Standard Price was 42,000 yuan/ton. This is not just the only major raw material problem encountered by the footwear industry. Earlier, this newspaper has repeatedly reported that the price increase in cotton has led to an increase in apparel retail prices. Even if the price breaks through the 30,000 yuan/ton mark, the price of cotton has not shown signs of falling back. Coupled with global factors, the price of oil, another important raw material, is also soaring, and the footwear industry continues to shift pressure to the retail side.

As a supplier to many domestic sporting goods brands, Taiya Group (002517) mentioned in its 2010 annual results report that due to the impact of raw material prices, the company has increased the selling price of soles and related products. At the same time, some brand enterprises also put “price increase” on the annual report, which is generally above 5%.

The price of major footwear materials has skyrocketed. At the beginning of the Xinyi Year, the shortage of human resources in the PRD industry has become a common problem. In addition to the “wage increase” and “please to challenge”, the traditional industry footwear industry faces three major issues. Raw materials, oil, rubber and cotton prices.

Due to the turbulent situation in North Africa, oil price volatility has not stopped recently, and at present it has not yet seen any solution to the problem. In addition to oil, the price of natural rubber reached the highest level in history, exceeding 40,000 yuan per ton. One year ago, this figure was only around 25,000 yuan/ton. Guolian Securities made predictions in an investment report, "Natural rubber prices will continue to rise this year."

Another cost issue that has plagued the footwear industry comes from cotton prices. Recently, after the Spring Festival of the domestic 328-class cotton spot was affected by factors such as the rise of the US cotton price, it has already re-stopped the price of 30,000 yuan/ton. The price on February 25 was 30,278 yuan/ton. The year-on-year high of the same period last year rose by more than 10%.

The increase in the price of raw materials in the footwear industry has caused many sports shoe companies to feel the pressure, but the more direct impact is on the upstream suppliers. As the product supplier of Anta, Xtep, 361 Degrees, and Hongxing Erke, Taiya Group (002517) announced in its 2010 annual results bulletin on February 17 that “As the price of raw materials has affected, the company has increased the sales price of soles and related products. ."

Wool is out of the sheep, and companies such as Anta and 361° that have successively issued financial reports or trade fair data have also mentioned in the article “raising the sales price of footwear products”.

Anta reported on February 21 that the average selling price of Anta footwear products and apparel products rose by 4% and 8.8% respectively. Management said that the production cost will continue to increase. In order to cope with inflation, this year's products will increase their prices. However, the average rate is about 10%.

The 361° financial report also said that “because of the pressure of staff costs and rising raw materials, the average selling price of shoes in the second half of last year increased by approximately 5.5%, and the average selling price of this year will also increase.” As one of the largest customers of Taiya, another A special domestic sports brand Xtep stated at the 2011 Q3 trade fair that "the price of footwear will not increase by more than 10%."

The situation of survival of the fittest highlights the fact that the entire shoe industry chain has raised prices with rising raw materials and Other factors, so that the pressure of price increases is distributed to the consumers on the retail side. However, this is only for consumers who purchase branded products.

“Most shoe manufacturers do not have scale or brand to support price increases. This year’s days are generally not easy.” A reporter from Guangzhou, a footwear professional market leader, told reporters in Southern Capital. According to him, due to the increase in raw material prices, the manufacturers are recruiting after the new year. In the absence of work, there are many who simply shut down or change jobs.

In response, Liao Jierong, an independent clothing industry analyst, explained that price increases are not a part of every company's initiative to "manipulate." “At the same time, large-scale sports apparel companies need a lot of marketing investment to maintain brand awareness and increase their reputation in order to ease consumer dislike for price increases.” She said that many brands do not have the strength to raise prices.

Compared to the brand side, the days of shoe suppliers and contractors look even worse. Many of the companies mentioned by the professional market executives who have closed down or changed businesses come from the two “processes” in the footwear industry. Liao Chih-kwong believes that similar to Yatai shares such shoe suppliers, the scale will become the key to whether the "price increase." "Rising raw material prices cannot raise prices without bargaining power, but they cannot leave production lines and factories empty. This can only do a loss." She predicts that as raw material prices are still rising in the short term, the new one The wheel shuffling has been inevitable.