HLA and Adidas join hands for mutual support
Author | Xie Yunzi
Editor | Zhang Fan
"The Men's Wardrobe" is going public again.
Recently, Hailan Home, an A-share listed company and the brand that people "visit twice a year", submitted a listing application to the Hong Kong Stock Exchange. However, the capital market's reaction was rather cold. On November 24th after the prospectus was announced, Hailan Home's stock price fell by 2.71%. It was also on this day that Hailan Home was officially removed from the MSCI China Index, reflecting international capital's doubts about its future growth potential.
In the past two years, Hailan Home's performance data has also declined. In the financial report for the third quarter of 2025, although the company's revenue increased slightly, its net profit attributable to the parent company decreased year-on-year. Moreover, the revenue of the main brand, Hailan Home, also declined by 3.99% year-on-year to 10.849 billion yuan.
Of course, the newly released IPO prospectus still has "surprises", which mainly come from Hailan Home's cooperation with Adidas. By holding a controlling stake in Sports, Hailan Home acts as an agent for Adidas in the sinking market and opens Adidas FCC stores (Future City Concept Store). As of the first half of the year, Hailan Home had 529 such stores in China.
In a certain sense, Hailan Home, which needs to obtain new growth and get rid of the "old - fashioned" image, is joining hands with Adidas, which is constantly clearing inventory and exploring the Chinese sinking market.
Cumulative net profit attributable to the parent company of Hailan Home from 2020 to the third quarter of 2025; Data from Wind
"Carrying rice with an empty sack", the asset - light model doesn't work anymore
Early on, Hailan Group was just a woolen mill in Jiangyin.
In early 2002, Zhou Jianping went to Japan for an inspection. He was deeply impressed by the self - selection model of Japanese clothing brand mass - sales. After returning to China, he founded the civilian men's business brand, Hailan Home.
In many early media reports, Hailan Home adopted a unique "trustee franchise" model at the beginning of its establishment. The core of this model is to allow franchisees to easily play the role of "hands - off managers". This model not only lowered the entry threshold for franchisees but also enabled Hailan Home to quickly form a market scale.
Based on this, Hailan Home transferred more pressure to suppliers.
Like many brands, Hailan Home does not directly participate in the design and production of products. Instead, after market research and sales data feedback, suppliers submit proposals, and then Hailan Home selects and places orders.
Image captured from the prospectus
Different from the industry, Hailan Home does not directly purchase from suppliers. Instead, it requires suppliers to directly take the goods to the stores for sale.
The prospectus also states that "We have an agreement with suppliers, allowing us to return unsold products to suppliers after the sales season and settle according to the actual monthly product sales. Suppliers can access our sales and inventory data for instant replenishment and production planning."
That is to say, Hailan Home adopts a "credit purchase" model similar to "carrying rice with an empty sack" for suppliers. It can get goods from suppliers first and pay for them after the goods are sold.
For the "returnable" products promised to suppliers, Hailan Home conducts secondary purchases and sells them without labels through subsidiaries such as "Haiyijia" and "Baiyibaishun". A merchant told 36Kr that he once visited a warehouse specializing in purchasing Hailan Home's surplus goods. "Thousands of square meters were filled with clothes, and most of them were sold at 10% of the original price."
It is certain that Hailan Home's model has a certain degree of innovation and has maximally "transferred" the inventory pressure.
However, in recent years, the company's inventory also faces the risk of rising.
The prospectus shows that Hailan Home's inventory includes two types of goods: "returnable" and "non - returnable". Among them, high - priced products such as T - shirts and down jackets with fast - changing styles are classified as "non - returnable". For a long time, the company has relied on forecasts to make procurement and production plans to manage inventory.
However, when market demand is affected by seasonality and consumer preferences change, the company's sales forecasts may deviate. The prospectus also emphasizes that "Due to the company's development and promotion of new products, it is unable to successfully establish stable and beneficial supplier relationships or predict demand under non - returnable purchases."
36Kr captured from the prospectus
Judging from the currently disclosed data, from 2023, 2024 to the first half of 2025, the proportion of Hailan Home's "non - returnable" inventory increased year by year, reaching 23.82%, 25.95% and 31.02% respectively. Looking at the overall inventory data, from 2022 to 2024 and the third quarter of this year, Hailan Home's inventory was 9.455 billion yuan, 9.337 billion yuan, 11.987 billion yuan and 11.518 billion yuan respectively.
Inventory situation of clothing brands, data from Wind
It is a clear fact that in the context of weak consumption, the competition for non - essential consumer goods has intensified.
After the pandemic, global consumers prefer more comfortable and practical clothing styles. As the post - 90s and post - 00s gradually become the main consumer group, their preference for traditional business men's clothing is weaker than that of their fathers. After outdoor sports became a trend, sports brands have continuously increased their investment in sports professionalism, and the functionality of products has also been upgraded.
All these have led to the fact that both in the capital market and the consumer market, sports brands and leisure brands are constantly squeezing the market share of traditional business men's clothing.
Previously, Hailan Home, which was trying to diversify, launched the fast - fashion brand Heijing, but the response was mediocre. The most crucial thing is that Hailan Home, with a history of more than 20 years, has never solved the problem of brand aging.
In 2016, Hailan Home signed a cooperation agreement with Lin Gengxin, which greatly improved its brand image. However, the company then had a problem with the cooperation poster with Zhang Songwen. To this day, despite continuous investment in marketing, Hailan Home is still regarded by young people as "Dad's wardrobe".
The financial report data also shows that in the third quarter of this year, the sales growth of Hailan Home's main brand was less than 3%. Behind the slowdown in sales, the sales expenses in the same period reached 3.524 billion yuan, a year - on - year increase of 5.12%.
In contrast, sports brands such as Adidas, with their young consumer groups and product technology R & D, are the key areas that Hailan Home urgently needs to break through.
Adidas, "looking for spring" in the sinking market
Not long ago, Zhou Lichen, the chairman of Hailan Home, excitedly introduced to the public during a live - broadcast, "There can't be anyone who doesn't know that we are the core agent of Adidas, right?"
This statement was unexpected, and the cooperation between the two sides began to attract more attention from the industry. The latest prospectus disclosed by Hailan Home further reveals the cooperation model with Adidas.
It is reported that in 2023, Hailan Home reached a long - term cooperation with Adidas by holding a controlling stake in Sports. Sports is responsible for all product procurement of Adidas FCC stores. Within the scope approved by Adidas, Sports has the right to product portfolio, local marketing and pricing. The product selection of this store type also focuses more on affordability and cost - effectiveness. In addition to daily management, store location selection and operation, Sports will also develop exclusive products for this special line.
According to a report in "Duojiao Spicy", the prices of Adidas products sold in FCC stores are lower than those in full - price stores and higher than those in outlet stores. The products mainly include the brand's regular - label products, over - season products, and the earlier - launched, youth - focused sports and leisure product line, the "adidas Neo" series.
36Kr searched for the "Sports Official Flagship Store" on Douyin and found that its total sales had reached 453,000. The best - selling product was Adidas' "Year of the Horse Limited Edition" mesh running shoes, priced at 279 yuan. The most expensive product was a long - sleeved wind - proof and warm - keeping down jacket with a hood, priced at 899 yuan.
Looking at the financial report data disclosed by Hailan Home, from May to December 2024, Sports' revenue was 990 million yuan, with an average monthly revenue of 140 million yuan. Calculated based on the 400 Sports stores counted at the end of last year, the average monthly turnover of each store was 330,000 yuan.
36Kr captured from the Douyin APP
In contrast, Topsports, Adidas and Nike's largest Chinese partner, focuses more on first - tier cities. However, when the entire industry enters a downward cycle, the Chinese sinking market, which can continuously clear inventory and obtain new growth, has become a key area for more international brands to expand.
After Adidas had a good recovery in 2024, its inventory increased in 2025 due to factors such as US tariff policies. This means that Hailan Home, which has been deeply involved in the sinking market for many years and has the right to speak, has become an important channel that Adidas cannot ignore.
Data shows that Hailan Home has a channel network covering 31 provinces across the country, covering more than 80% of counties and cities. According to "Shanxi Zai Kan", Hailan Home has long - term cooperation experience with local governments and commercial real - estate and has bargaining power in location selection negotiations. This is exactly what Adidas needs.
Of course, the competition in the Chinese sinking market is becoming increasingly fierce. Even though Adidas has obtained the key to enter from Hailan Home, the challenge lies in how to use it correctly.
A consumer from Zaoqiang County, Hengshui City, Hebei Province, told 36Kr that young people wearing Arc'teryx or Lululemon can often be seen in this "small county". However, some consumers in the sinking market said that they would not consider buying Adidas or Nike products and would focus on cost - effectiveness.
It is a clear fact that the current Chinese sinking market is complex and diverse. In low - tier cities, Adidas not only needs to ensure gross profit while clearing inventory but also needs to face the competition from local brands, as well as competition from international brands such as Nike, Arc'teryx, and The North Face.
Actually, as early as the third quarter of 2023, Adidas' senior management said that in the more popular market, if Adidas wants to attract more consumers, it needs to launch more popular products for the sinking market while not losing high - quality sports performance.
Zhang Qing, the founder of Key Road, also emphasized that the current post - 00s and post - 05s consumers are becoming less fascinated by international big brands. In the sinking market, brand owners need to meet people's needs for "newness and change" as much as possible while keeping costs under control. In his view, consumers in low - tier cities not only pay attention to the identity recognition behind the brand but also focus on whether the product function can meet the needs of "light exercise".
In the clothing field, whenever it comes to brands and trends, it is always an evolution and penetration from top to bottom. This means that both Hailan Home and Adidas can truly improve or reshape their brand tonality and regain market power only through product innovation and the empowerment of culture and sports professionalism.
In the future, with the continuous expansion of Adidas FCC stores, the running - in between the two sides may have just begun.
*Disclaimer:
The content of this article only represents the author's views.
The market is risky, and investment should be made with caution. Under any circumstances, the information in this article or the opinions expressed do not constitute investment advice for anyone. Before making an investment decision, if necessary, investors must consult professionals and make decisions carefully. We have no intention of providing underwriting services or any services that require specific qualifications or licenses for the parties involved in the transaction.
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This article is from the WeChat public account "36Kr Finance", author: Xie Yunzi Zhang Fan, published by 36Kr with authorization.