Hla Group is actively seeking new opportunities for transformation. Recently, the company announced a collaboration with adidas. As part of this partnership, both parties unveiled a commemorative sweatshirt under the HLAadidas co-branding initiative. Additionally, Hla Group and adidas announced plans to systematically upgrade the running community known as "Lan Pao Yan Xi She" (Lan Running Study Society).
Hla Group has long been eager to make inroads into the sports sector. For instance, the company has frequently sponsored major sporting events, including the Wuxi Marathon, the Jiangsu Provincial Urban Football League, the Chinese Men's Basketball Team's warm-up matches, and the Jiangyin Village Basketball Association (Village BA). The "Lan Pao Yan Xi She" and its flagship event, the HLA POW "King Master Challenge," represent a deeper strategic move by Hla Group into the sports domain.
Throughout its years of development, menswear has remained the core business of Hla Group. However, an analysis of the company's long-term financial performance indicates that it continues to face certain challenges. Industry observers suggest that, amid fluctuating results, Hla Group's casual menswear segment may be approaching a growth ceiling. Addressing this potential business plateau has become a critical issue for the company's future development.
According to Zhou Ting, Dean of the Key Customer Research Institute, the collaboration with adidas represents Hla Group's attempt to find new growth drivers. "Hla Group's traditional strengths lie in its efficient supply chain management and value-for-money product positioning. However, with persistent declines in offline foot traffic and rising online customer acquisition costs, the brand's reliance on physical retail to drive growth has encountered bottlenecks. The brand is now caught in a squeeze from both ends: it lacks the brand premium needed to move upmarket and gain acceptance among high-end consumers, while simultaneously facing pressure from lower-cost generic products at the mass-market level, leading to a loss of mainstream customers. Hla Group is currently at a critical juncture for strategic transformation, and the sports sector represents an important direction for breaking through this impasse," Zhou Ting stated.
Regarding the specifics of the collaboration, inquiries were made to Hla Group, but no response had been received by the time of publication.
For Hla Group, venturing into the sports sector requires the support of a professional brand, and adidas is undoubtedly a highly suitable partner. Conversely, for adidas, further growth in the Chinese market is a key objective.
The current Chinese sports market is already a fiercely competitive landscape with numerous brands vying for position. To achieve further growth, reaching a broader base of "casual sports participants" has become crucial, and this is precisely where Hla Group holds an advantage.
According to publicly available data, as of June 30, 2025, Hla Group operated 5,631 Hla Group stores across 31 provincial-level administrative regions in China, covering nearly all prefecture-level cities. The company has established a global sales network comprising 5,723 Hla Group stores, including 92 overseas locations. Beyond menswear, its proprietary brands include the affordable luxury womenswear label OVV and the premium infant and children's wear brand Ying Shi (Yeehoo).
Based on information from Hla Group's prospectus, in 2023, the company entered into a long-term strategic partnership with adidas through Sports. As of June 30, 2025, Hla Group had opened 529 adidas FCC (Futurecraft) stores in China. Hla Group previously indicated that it expects this number to exceed 700 by the end of 2025, which could further assist adidas in expanding its distribution network into lower-tier cities.
From the perspective of Cheng Weixiong, a footwear and apparel industry brand strategy consultant and founder of Shanghai Liangqi Brand Management Co., Ltd., Hla Group and adidas might seem unrelated at first glance. However, a closer look reveals that Hla Group's extensive channel distribution network is exactly what adidas currently needs. For adidas to achieve more localized development in the Chinese market, it requires more distributors and access to lower-tier city channels. "What adidas values is precisely Hla Group's capability to penetrate these下沉市场 (lower-tier markets), especially as adidas is currently expanding from first- and second-tier cities into fourth- and fifth-tier cities. The collaboration with Hla Group is significantly beneficial for this strategy," Cheng Weixiong commented.
The industry is adopting a wait-and-see attitude regarding whether Hla Group can, following its collaboration with adidas, develop a strong enough "sports DNA" to compete with established sportswear brands in a saturated market and establish this as a new pillar for its financial performance.
In Zhou Ting's view, for Hla Group to gain a firm foothold in the sports sector, it needs to engage deeply across the entire brand operation chain. "On one hand, Hla Group must precisely target specific sports sub-segments that offer substantial market space and relatively moderate competition, aligning these choices with its own resource strengths and development goals. On the other hand, the company needs to assemble a professional team dedicated to sports brand operations, as the operational logic for casual menswear fundamentally differs from that of sportswear," Zhou Ting added.
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