Mergers and acquisitions, incubation, synergy, ANTA's multi-brand "infinite game"

ANTA further consolidates its leading position.

In a pressured market environment, ANTA still achieved a double-digit growth of 14.3% in the first half of the year, with revenue reaching 38.54 billion yuan.

All brands under its umbrella achieved record high revenues in the first half of the year.

Among them, the main brand's revenue increased by 5.4% year-on-year to 16.95 billion yuan, while FILA's revenue grew by 8.6% year-on-year to 14.18 billion yuan.

All other brands, including Kolon and Descente, generated revenue of 7.41 billion yuan, a year-on-year increase of 61.1%, further increasing their share to 19.2%.

The group-controlled Amer Sports turned a profit in the first half of the year, bringing ANTA a share of the joint venture profit of 434 million yuan.

Due to the high base formed by Amer Sports' listing in the same period of 2024, ANTA's net profit attributable to shareholders decreased by 8.9% year-on-year to 7.03 billion yuan in the first half of the year.

After excluding the one-time gains from Amer Sports' listing and the profits and losses from joint ventures, ANTA's net profit attributable to shareholders was 6.6 billion yuan, a year-on-year increase of 7.1%; the net profit margin attributable to shareholders decreased by 1.2 percentage points year-on-year to 17.1%.

Market pressure in the second half of the year remains severe.

Management pointed out that retail sales of ANTA's main brand and FILA were under pressure in July and August, showing a weaker trend than in the second quarter, but there have been signs of recovery in the past week.

Against this backdrop, ANTA has adjusted its full-year revenue guidance: the growth rate of the main brand has been lowered from high single digits to mid single digits; the growth rate of other brands like Kolon and Descente has been raised from 30% to 40%; FILA's mid single-digit growth expectation remains unchanged.

For ANTA, while improving the operational efficiency of existing brands, it also needs to continuously search for and integrate acquisition targets, facing diverse and complex challenges.

Whether it can maintain overall growth, drive the main brand and FILA to break through single-digit growth, sustain profit levels, and ensure high-quality operations of new brands are closely monitored by the market.

Growth Differentiation

During the outdoor market's golden period, newcomers represented by Kolon and Descente remain the core driving force for growth.

Kolon performed particularly well, leading with an almost 80% year-on-year growth rate, becoming the fastest-growing brand in the first half of the year, while maintaining a discount rate above 15%.

According to ANTA's Executive Director and Co-CEO Lai Shih-Hsien, Kolon has historically performed well in Northeast and Northern regions, and has also made breakthroughs in areas outside the Northeast this year.

Descente's store efficiency improved from nearly 2.3 million yuan last year to about 2.7 million yuan, with the number of stores achieving an original store efficiency of 50 million yuan increasing from 16 to 33.

For Descente and Kolon, which focus on efficient and high-quality large stores, regional penetration will continue to bring growth opportunities.

HuaXing Securities analyst Jiang Xuefeng pointed out that the number of Descente and Kolon stores grows at an annual rate of about 10%. According to his observations, with the increase in SKUs for spring and summer, Descente will gradually expand from its core Northeast region to the southern regions.

However, overall, the high-end niche brand positioning determines that its store establishment standards are strict, and the ceiling for opening stores is relatively low.

The improvement in store efficiency is becoming increasingly important for ANTA's overall long-term growth. In the past five years, ANTA has achieved a revenue growth of 1.6 times while maintaining a relatively stable total number of stores, reflecting a significant optimization of retail efficiency.

However, the two cornerstone brands, ANTA's main brand and FILA, have yet to break through the bottleneck of single-digit growth and are still in the adjustment period for improving operational efficiency.

The current core narrative of the main brand revolves around channel upgrades.

To solve the homogenization dilemma of "thousands of stores looking the same," in 2024, the ANTA brand will segment its store system into five levels to precisely match the needs of different business districts and customer groups.

The flagship and arena-level stores target high-end, landmark business districts, while ANTA Champion and ANTA Collection focus on outdoor scenes and mid-to-high-end trendy shoes, respectively.

Arena-level stores have an average monthly store efficiency exceeding 1 million yuan, reaching more than three times that of traditional stores; flagship stores and ANTA Champion stores have a monthly efficiency of around 500,000 yuan.

While exploring new store formats, ANTA is also gradually eliminating inefficient stores.

In the first half of the year, the main brand net closed 10 stores, bringing the total number of stores to 9,909.

By the end of 2025, the total number of ANTA brand stores is expected to remain between 9,600 and 9,800, indicating that there is still an adjustment space of about 100 to 300 stores in the second half of the year.

FILA, which just completed a leadership change at the beginning of the year, is currently still in the early stages of organizational adjustment, brand reshaping, and category expansion.

Recently, FILA proposed the "ONE FILA" strategy, focusing on the middle-class consumer group, with the target audience extending from individuals to families and communities, emphasizing the expansion of two high-end sports tracks: tennis and golf.

In the first half of the year, FILA introduced new functional lightweight running shoes, tennis, golf, and other footwear products, with the revenue share of footwear products expected to further increase from 40% in 2024.

Due to increased product investment, e-commerce channels, and the rising revenue share of footwear products, FILA's gross profit margin declined by 2.2 percentage points year-on-year, falling below 70%.

Under ideal circumstances, the improvement in store efficiency will release operational leverage, helping to improve operating profit margins.

However, both the upfront investments required for product innovation and channel expansion may bring uncertainty to profit performance.

In 2024, ANTA's gross sales difference decreased by 3.4% year-on-year, causing the operating profit margin to drop to 23.4%.

This trend was alleviated in the first half of this year.

Against the backdrop of an overall gross profit margin decline of 0.7 percentage points, ANTA managed to increase its operating profit margin to 26.4% through refined operations and resource optimization, achieving a new high for mid-year reports in nearly five years.

However, ANTA still has other brands in the cultivation period.

For example, the recently acquired Jack Wolfskin, but this consolidation also increased ANTA's inventory turnover days to 136 days in the first half of the year, up 22 days from the same period last year.

ANTA will develop a 3-5 year revitalization plan for Jack Wolfskin, focusing on reshaping the product and brand system around core values.

Jack Wolfskin's revenue scale in China is expected to be around 700-800 million yuan in 2024, accounting for about 30% of the brand's global revenue. Currently, it has about 30 directly-operated stores and over 100 franchise stores in China.

Although the brand is expected to contribute incremental revenue starting in the second half of the year, it may incur losses and cost pressures this year due to integration and consolidation

Continuous "Shopping"

ANTA is still continuously improving its brand matrix and strategically filling market gaps.

Chairman Ding Shizhong further elaborated on the logic of multi-brand acquisitions in a letter to shareholders:

First, acquiring brands with strong brand value and genes, achieving value leap through strategic reshaping;

Second, investing in high-potential emerging brands, establishing cooperation early, and exploring common growth.

The former reminds one of helping ANTA extend its outdoor product line from high-end to the mass market with the brand Wolf Claw; the latter may be reflected in ANTA's recent announcement of cooperation with the South Korean fashion group MUSINSA.

MUSINSA started in 2001 as an online community for sneaker enthusiasts and has now developed into South Korea's largest fashion platform group.

In addition to its main platform, MUSINSA also operates multiple retail platforms, including women's e-commerce boutique 29CM, limited edition platform soldout, and designer brand collective store EMPTY.

Offline, it mainly operates its own brand specialty store "MUSINSA STANDARD" and multi-brand warehouse-style collective store "Musinsa Store."

The core value of MUSINSA to ANTA may lie in its rich resources of trendy brands and strong reach to young consumers.

As a vertical fashion service platform targeting young people aged 10 to over 30, Musinsa Store gathers more than 10,000 brands, covering diverse styles such as basics, casual, streetwear, formal wear, and contemporary fashion.

Although MUSINSA has not officially entered the Chinese market, its appeal to Chinese consumers has begun to show.

Chinese customers account for about one-third of MUSINSA's foreign visitors.

In the first half of 2025, the transaction volume of Chinese tourists at the Seoul Seongdong and Hongdae stores achieved triple-digit growth year-on-year.

MUSINSA plans to open over 100 stores in China by 2030, with the first store possibly landing in Shanghai in the fourth quarter of this year.

ANTA stated that the newly established MUSINSA China will lead the development of "MUSINSA STANDARD" and "Musinsa Store" in the Chinese market.

In Ding Shizhong's view, ANTA's investment in MUSINSA China "is not a deviation from the main track, but rather a better alignment with young consumer trends, exploring the integration boundaries of the fashion industry and the sports industry, bringing new inspiration to the sports track."

He emphasized that MUSINSA China will also leverage ANTA's systemic advantages in brand management, retail operations, and backend empowerment to achieve synergistic development.

Unlike previous acquisition cases, this joint venture company is operated primarily by Musinsa, with ANTA holding only 40%.

This arrangement can be seen as a cautious trial in a new market, and may also aim to preserve financial flexibility, leaving room for potential strategic targets.

ANTA has become a frequent buyer in the sports brand acquisition market.

Since the beginning of this year, there have been multiple rumors in the market about its intention to acquire brands such as Reebok, Puma, and even Canada Goose Perhaps it won't be long before ANTA's next acquisition target is revealed