China sportswear firm Anta's turnover falls 14pc in first half amid oversupply

Anta Sports Products, the mainland's biggest sportswear company by market share, reported a 14.4 per cent decline in turnover in the first half as the industry continued to struggle with oversupply.

Basic earnings per share declined 18.7 per cent. The company's profit margin shrank 0.7 per cent, in what might be a sign the worst is over for the industry.

"The industry is not the problem, nor is the market the problem. The problem is that the industry has grown too fast," said Anta's chairman and chief executive, Ding Shizhong. "There has been too much race-to-the-bottom competition. Supply exceeds demand, and you end up with too big an inventory."

The firm's average inventory turnover period rose by eight days in the first six months to 58 days. Anta tried to solve its excess inventory problem by destocking - lowering prices, making use of online sales platforms, closing inefficient stores and controlling new retailer orders.

That resulted in turnover of 3.37 billion yuan (HK$4.27 billion) in the first half, compared with 3.93 billion yuan in the same period last year. Net profit fell 18.7 per cent to 625.7 million yuan.

The firm reduced the number of shops on the mainland to 7,834, from 8,075 at the end of last year. It plans to have 7,600 to 7,700 shops open at the end of this year.