Nike looks back, but Topsports and others have long changed their ways of doing business.

Recently, domestic sports distributor Topsports released its 2024/25 financial report, showing that while its revenue reached 27.01 billion yuan, its annual profit declined by 42%.

The poor performance of the main brands remains the reason. More than 80% of Topsports' performance revenue comes from Nike and Adidas. In recent years, Adidas has started to reduce its investment in single distribution partners. With a revenue share of over 60%, Nike has become the barometer of Topsports' financial report.

Topsports' performance has also been affected by Nike to a certain extent. From December last year to February this year, Nike's North American market declined by 4%, and its market in China decreased by as much as 17%. In recent years, Nike has intended to re - layout its distribution channels and launched many new products that meet the current sports trends, but it seems to have no effect for the time being. As a former close partner, Topsports also has its own plans.

From the role of channel sales to retail operation

Since May this year, Soar, a professional running equipment brand from the UK, and Norrøna, a high - end outdoor brand from Norway, have successively announced their entry into the Chinese market. Earlier, the Canadian trail - running brand norda also entered the Chinese market, which has sparked quite a bit of discussion both inside and outside the industry.

Behind these brands stands the same promoter - Topsports.

Topsports' "de - Nikeization" roughly started after the pandemic. In 2023, Topsports signed contracts with multiple brands including HOKA ONE ONE and Kailas at once, and invested in Cold Mountain, a snow sports equipment retailer that holds the Chinese agency rights for multiple international snow sports brands such as Burton and Nitro. At that time, outdoor sports began to become popular in China, and the performance of niche running shoe brands such as HOKA and On soared. In the 2022 fiscal year, HOKA's annual revenue increased by 56% year - on - year, reaching 892 million US dollars.

Perhaps to draw a clear line from its former agency role, Topsports provides almost nanny - style full - link support for these newly - signed brands, including communication, promotion, channel sales, and user operation.

Previously, a person familiar with the situation close to Topsports revealed to the media that after signing the contracts, Topsports will carry out a series of online and offline plans for all the agency brands, including opening single - brand flagship stores both offline and online, as well as building private domain channels. In addition, it will also fully combine professional events and circle activities in the brand's vertical category to accurately reach the target customer group and achieve the goal of expanding the brand's influence.

In the information shared with 36Kr, Topsports also said that it will adopt more refined operations for relatively niche vertical sports brands, "not pursuing blind expansion", and "continuously transforming from the traditional channel sales role to a one - stop sports retail operator".

The channel network that extends like capillaries to counties at all levels across the country was once Topsports' winning weapon. As the sports business segment of Belle International, a footwear and apparel retailer, Topsports used to be the largest sports footwear and apparel retailer in China, relying on the channels that Belle had in China earlier. In 2017, "the king of shoes" Belle was privatized by a consortium composed of Hillhouse and CDH and delisted from the Hong Kong Stock Exchange. However, in 2019, Topsports was spun off from Belle and independently listed on the Hong Kong Stock Exchange.

This time coincided with the explosion period of China's sports industry: the scale of the domestic sports retail market had reached 235.7 billion yuan (data from 2018), with a four - year compound growth rate of 12.8%, making it the second - largest sports consumer market with the fastest growth rate in the world.

Favorable timing and geographical location gave Topsports the ability and confidence to take on the business of Nike and Adidas. Different from its foreign "peers", most of the stores that Topsports set up for Nike and Adidas are single - brand stores. In other words, Topsports is the one that sells Nike and Adidas products across the country.

Transformation is not easy, but it is the path that Topsports must take. The sports retail market is reshuffling, and whether it can successfully turn around will determine its future.

The rapidly changing retail landscape

Looking overseas, Topsports is not the only one trying to save itself.

Last week, Foot Locker, the "overseas version" of Topsports, dropped a bombshell, announcing that it would sell itself to Dick's Sporting Goods for 2.4 billion US dollars. The latter is also a sports equipment retail giant originating from the United States.

The businesses of Foot Locker and Dick's overlap but also have their own focuses. Foot Locker is a globally leading sports shoe retailer with annual sales of nearly 8 billion US dollars, and its main stores are located in urban areas; while Dick's is more like the North American version of Decathlon, where you can buy everything from paddleboards to bicycle helmets. Its stores are usually located in suburban areas, and its customer group is families rather than trendy young people. After the information was announced, both sides also said that after the merger, they will improve operational efficiency and expand their respective scales, and "the complementarity is greater than the competitiveness".

Analysts have mixed reviews of this merger. Since The Wall Street Journal reported on Wednesday that the two companies were about to reach a deal, Foot Locker's stock price has risen by about 80%, but Dick's stock price has fallen by more than 10%.

Those who are pessimistic say that Foot Locker's declining performance is a burden for Dick's, while those who are optimistic believe that this is a cooperation that makes up for each other's deficiencies. Considering the rapidly changing sports market, having more say is not a bad thing.

Whether it is pessimistic or optimistic, the negotiation needs to start over. "Some brands may lose shelf space, while some brands will get more display channels. Perhaps no brand is paying closer attention to this than Nike," said Tom Nikic, an analyst at Needham & Company, as quoted by the fashion media Business of Fashion. Last year, Nike accounted for 59% of Foot Locker's total procurement.

When analysts listed the winning and losing brands, Adidas, On, and Puma became positive and negative examples. The former two have either significantly recovered their performance or are in a period of rapid rise, "perhaps they can get more shelf space", while Puma is facing challenges.

It is worth mentioning that Foot Locker has also tried to promote business diversification through acquisitions and mergers in the past few years, but with little success, which proves that operating a new brand from scratch is not that easy. In addition, Foot Locker has always been slow in the operation of its membership system and the layout of online channels. In today's world where overseas consumers are more willing to shop online, there is still much room for improvement.

Topsports is also learning lessons from the actions of its overseas peers. A person familiar with the situation revealed to us that in the future, Topsports will also adopt a more flexible store layout to attract customers, "such as multi - brand collection stores". He cited Soar, which was recently acquired, as the most likely brand to be the first to try this.

All signs indicate that the competitive landscape of sports retail has reached a time of change. In this large market, the performance of this established retailer will continue to attract everyone's attention.