Anta Sports Products, the leading Chinese sports apparel and footwear company, has sealed a joint venture agreement with Kolon Sport to sell the South Korean brand in Greater China, primarily to complement its offering in the outdoor apparel market.
Anta has become the largest Chinese sports apparel and footwear group, with sales reaching 13.35 billion yuan renminbi (€1.84bn-$1.94bn) after an increase of 20.0 percent last year. The Anta brand itself is positioned as a popular sports brand, with a focus on football and basketball. Its products are distributed through 8,860 single-brand Anta stores at the end of 2016.
The company holds Chinese rights to the Fila brand and last year it sealed a partnership with Descente, the Japanese winter sports apparel brand, covering the upper end of the functional sportswear market in China. Kolon Sport, which is one of Korea's largest sports and outdoor brands, is meant to complement the offering in the medium-high segment of the outdoor sportswear market.
Anta said in its announcement that the two parties will ultimately have an equal interest in a joint venture that will cover Mainland China, Hong Kong, Macau and Taiwan. The board of directors will be composed of three members appointed by Anta and two by Kolon. The deal was formally signed between Kolon Corporation, Kolon Industries and Anko Sports Products, a subsidiary of Anta Sports Products.
Kolon reportedly started exploring the Chinese market in 2016 and was sold in more than 200 Chinese stores by the end of the year. A director of Kolon Industries was quoted as saying in Business Korea that the agreement should raise the brand's recognition in Greater China, where it was aiming to become the leading outdoor brand in the market.
Anta is capitalizing on growing interest in outdoor and winter sports in the run-up to the Beijing Winter Olympics, to be held in 2022. In publishing its financial results last week, the company boasted that Xi Jinping wore Anta-branded winter sportswear when he went to Zhangjiakou, where some of the mountain sports competitions will be held in 2022. Anta said this turned the Chinese president into the brand's latest unofficial “endorser,” creating a valuable brand connection between Anta and the 2022 Winter Olympics.
The Chinese group has made rapid progress with Descente, after an agreement in February last year to form a joint venture with the Japanese brand, with a 60 percent stake held by Anta. Descente's first store in China opened in August and five more were opened by the end of the year.
The full results of the Anta group, which was established in Fujian province and is listed in Hong Kong, will be published in SGI Europe. The company raised its gross margin by 1.8 percentage point to 48.4 percent last year, while its operating profit margin dipped by 0.2 percentage points to 24.0 percent. Its net profit moved up by 16.9 percent to RMB 2,385.5 million (€329.2m-$346.7m), allowing Anta to boast that its profit more than quadrupled in the last decade.