For the first time, a veteran men's apparel name, Hla Group Corp.,Ltd., appeared on the sponsorship list of a trail running race. Recently, the SKYLINE Trail Series was launched in Shanghai, with Hla Group Corp.,Ltd. appearing as a core partner through its professional sports brand "HLA POW澜跑," exclusively sponsoring the high-altitude events in Basong Tso and Helan Mountain. Over the past two years, from the Wuxi Marathon to the "Su Chao" city football league, and then to the Jiangyin "Village BA" and the Chinese men's basketball warm-up games, Hla Group Corp.,Ltd. has been continuously increasing its investment in sports scenarios, attempting to reshape the "man's wardrobe" through events, communities, and brand IP. However, on a more practical business level, this high-frequency exposure has not brought about growth of the same magnitude. In 2025, Hla Group Corp.,Ltd. achieved revenue of 21.626 billion yuan, a year-on-year increase of 3.19%, with profit growth nearly stagnant. The main brand has peaked in first- and second-tier markets, and diversified businesses have not yet formed effective support. As selling its own clothes becomes increasingly difficult, Hla Group Corp.,Ltd. began to ponder: could it leverage its over twenty years of offline channel management experience to sell others' clothes? Over the past two years, Hla Group Corp.,Ltd. has begun attempting to answer this question. Through its subsidiary "Sibosi Brand Management (Shanghai) Co., Ltd.", the company has simultaneously undertaken two types of businesses that seem different but share similar logic: the adidas FCC store system and the JD-SWR Outlet discount channel. As of 2025, the number of adidas FCC stores had grown from 433 to 723; JD-SWR Outlets also expanded from 12 to 60. In 2025, revenue from "Other Brands," which includes diversified in-house brands and the aforementioned new businesses, reached 3.447 billion yuan, a year-on-year increase of 29.18%. The path to penetrating the mass market beyond its own brands is gradually becoming clear, but questions arise: as the former "king of light assets" gradually moves into the deep waters of self-operated retail, is this the discovery of a second growth curve beyond the man's wardrobe, or the prelude to another cycle of inventory risk returning to the balance sheet?
The path for the sports giant to penetrate the mass market began in late 2022, when Hla Group Corp.,Ltd., through its subsidiary, jointly established Sibosi with Haixin Sports. Initially relying on platforms like JD-SWR and Vipshop, it distributed surplus inventory of international brands such as Nike, adidas, PUMA, Vans, and ASICS. In 2023, Sibosi achieved operating revenue of 597 million yuan and a net profit of 85 million yuan, with a net profit margin of about 14%, contributing approximately 34 million yuan in investment income to Hla Group Corp.,Ltd.. However, Sibosi did not stop at being a middleman for "online inventory clearance." In 2023, Hla Group Corp.,Ltd. established a long-term cooperation with adidas, increasing its stake in Sibosi to 40%; by 2024, it completed a controlling consolidation, and Sibosi gradually transitioned towards becoming a "channel operator." What truly changed the nature of the business was the implementation of the adidas FCC (Future City Concept) project. FCC stands for "Future City Concept Store," which in the adidas system is primarily aimed at channel expansion in the mass market. Its product pricing sits between full-price stores and outlet stores, covering standard products, past-season products, and the earlier launched youthful sport-casual line "adidas Neo" series. In terms of specific division of labor, adidas is responsible for exclusively developing product lines suitable for the FCC channel, emphasizing more cost-effective price points and more casual designs; Hla Group Corp.,Ltd. controls site selection, store opening, and operations, mastering the product mix and sales rhythm through a buyout model. The advancement of the FCC project coincided with a critical phase of adidas's inventory recovery. Post-pandemic, international sports brands generally entered a destocking cycle. Traditional destocking paths—such as e-commerce promotions, outlet systems, and channel clearances—are either limited in efficiency or have a significant impact on the price system. Some views suggest that FCC, by adopting a "customized supply + channel stratification" approach to handle specific inventory, represents a compromise. Hla Group Corp.,Ltd., leveraging its years of accumulated channel intuition and operational experience in the mass market, became a key partner in this model. In terms of expansion methods, FCC franchise stores are highly isomorphic to the classic "Hla Model": partners bear rent and operating costs but do not carry inventory risk; goods are delivered on a consignment basis by Sibosi. According to data disclosed in Hla Group Corp.,Ltd.'s prospectus, as of mid-2025, FCC had a total of 529 stores in the Chinese market, of which 236 were directly operated stores and 293 were franchise partner stores. However, doubts remain. As adidas penetrates the mass market, brand dilution is an almost unavoidable concern. A fashion industry analyst pointed out that adidas's move is essentially executing a strategy of "trading brand equity for market share," but the actual effectiveness remains questionable. The core doubt lies in whether some product lines carried by FCC—such as adidas Neo, which previously failed in the Chinese market due to uncompetitive pricing against local brands—possess sufficient competitiveness in the mass market. From an industry perspective, since the second quarter of 2023, adidas's performance in China has gradually recovered, reaching a阶段性高点 in 2025, but its growth rate and market share remain under pressure within the overall sportswear and footwear market. Another senior apparel and footwear consultant pointed out that the overall downward trend of street-side stores is difficult to reverse, and the growth potential for FCC stores on an existing base is likely limited. Despite this, the pace of cooperation between the two parties has clearly accelerated. At the end of 2025, Hla Group Corp.,Ltd. and adidas announced the joint creation of a "Sports+" ecosystem, extending the boundaries of cooperation from channel distribution to event operations, product co-creation, public welfare actions, and cultural dissemination. The "HLA POW Study Club" became the core vehicle for their joint marketing efforts, with its event IP "HLA POW王者大神挑战赛" attracting over ten thousand runners to register and live stream views exceeding one million. The channel end remains the foundation for all this. By the end of 2025, the number of adidas FCC stores operated by Sibosi had reached 723, with a net increase of 290 stores for the year.
After the FCC model validated the basic framework of "major brand cooperation + surplus goods + mass market," Hla Group Corp.,Ltd. attempted to replicate and generalize this model to build a multi-brand, full-category discount retail matrix. In July 2024, Hla Group Corp.,Ltd. reached a strategic cooperation with JD-SWR Group to jointly promote omni-channel outlet business, leading to the establishment of the operating entity Shanghai Jinghai Outlets. In March 2026, JD-SWR further increased its investment through Suqian Hanbang, locking its stake at 20% (Hla holds 70%), completing a deep, long-term binding at the equity level. In terms of collaboration and division of labor, JD-SWR provides traffic and brand endorsement, Sibosi is responsible for procurement and online operations, while Hla Group Corp.,Ltd. leads its most fortified area: offline site selection and store management. JD-SWR Outlets exhibit明显的 "light asset + consignment" characteristics. According to estimates from a Founders Securities research report, about 90% of its goods use a consignment model, while about 10% of best-selling goods use a buyout model. Under the consignment system, after goods are sold, Hla takes about a 40% share; the risk of unsold goods is returned to the supplier. On the channel end, JD-SWR Outlets cooperate with shopping malls on a commission basis, with malls typically charging only a 5%-6% rental commission, plus about a 3% platform fee. Compared to the heavy-asset buyout model of traditional suburban outlets, this approach significantly reduces capital occupation and inventory risk, boasts higher turnover efficiency and ROE, and, by locating in the mass market, alleviates direct conflict with full-price stores. The feasibility of promoting this model at present is also closely related to the industry environment. Brand owners are eager to clear inventory pressure through new channels without bursting the price system in first- and second-tier cities; meanwhile, commercial real estate in lower-tier cities is facing a招商寒冬 and is open to discount formats with traffic-driving capabilities. A Secretary-General pointed out that even leading commercial projects like Wanda and Longfor are increasingly valuing the complementary role of discount formats. "Introducing such an anchor tenant, even at the cost of losing a few brands, is understandable." Driven by both supply and demand, JD-SWR Outlets were rapidly implemented, opening 48 stores within the past year. Its offline stores are mostly located in core business districts of third- to fifth-tier cities, with areas between 3,000-5,000 square meters, introducing brands like adidas, PUMA, and COACH, emphasizing high cost-effectiveness and a one-stop消费体验. In the first half of 2025, JD-SWR Outlet business revenue was 42.18 million yuan. Under the consignment model, the company recognizes revenue as an agent, recording only the commission or fee portion, resulting in a gross profit margin as high as 95% on the financial statements. However, under the consignment model, Hla Group Corp.,Ltd.'s actual control over product procurement, pricing, and supply chain sources weakens. The aforementioned senior apparel consultant analyzed that while JD-SWR Outlets can currently access surplus goods from international brands, they are restricted by the tight domestic distribution system and find it difficult to reach the product portfolios of domestic brands like Anta, Li-Ning, and Lilanz, which constitute the "basic market" in the mass market. A横向对比 shows that overseas urban outlet leader TJX relies on a buying system for "opportunistic buyouts," building a moat through selection and bargaining power. The competitive barrier for JD-SWR Outlets currently remains at the level of channel红利 and选址惯性. A deeper concern is that when inventory risk is simply transferred to the brand owner rather than hedged by terminal retail capability, superficial channel prosperity can easily掩盖迟钝的供应链感知. Will this kind of "channel integration" reliant on the光环赋能 of external brands slide back into the inefficient cycles that Hla's main brand once experienced?
The joint venture + returnable goods model once gave Hla Group Corp.,Ltd. significant operational flexibility. Upstream, the company obtained goods on credit coupled with "returnable" terms, transferring the risk of unsold stock to suppliers; downstream, franchisees were more like "financial investors" providing capital and bearing operating costs, only sharing in revenue proportionally. Through this structure, Hla Group Corp.,Ltd. was able to achieve scale expansion and high profits simultaneously without occupying excessive capital or bearing full inventory risk. During the era of founder Zhou Jianping, Hla Group Corp.,Ltd. was once an industry "money machine": the net profit margin长期维持在 above 20%, with ROE as high as 30%. However, the essence of the "light asset model" is leveraging brand and channel power to use supplier and franchisee funds to撬动规模. Its premise is that the channel and brand must be sufficiently strong. But this premise is collapsing. In recent years, despite successively signing明星代言 like Lin Gengxin, Pan Zhanle, and Zeng Shunxi, the stereotypical image of the "man's wardrobe" has increasingly solidified into the "dad's wardrobe," with brand appeal continuously declining. Once terminal sales slow down, the operating costs borne by franchisees can no longer cover their share of revenue, the willingness to close stores increases, and both overall scale and supply chain bargaining power are shaken. In this sense, many of Hla Group Corp.,Ltd.'s adjustments, including new businesses, are not an active choice to "become heavier," but a被迫走向零售本质 path after the failure of the original model. In terms of channel structure, the company has been持续推进 "reducing franchises, increasing direct operations" in recent years. As of the end of 2025, the proportion of directly operated stores among all brand stores had increased to 32.4%, up nearly 17 percentage points from three years ago. The gross profit margin of directly operated stores reached 62.6% in 2025, far exceeding the 40% of franchise stores, but rising costs such as sales staff wages and rent pushed the overall sales expense ratio up by over 5 percentage points compared to three years ago, reaching 23.8%. If the change on the channel end意味着 "cost shift upwards," then the change on the inventory end意味着 "risk returning to the balance sheet." As of the end of 2025, the company's inventory book value was as high as 10.819 billion yuan, and the inventory turnover days climbed to 344 days, an increase of 14 days from the previous year. Correspondingly, the company made a full-year inventory impairment provision of 495 million yuan, and the cumulative inventory impairment provision had reached 941 million yuan. Investment in new businesses has further amplified this trend. Whether it is the FCC model led by Sibosi or the outlet format cooperated with JD-SWR, they are本质上 closer to "self-operated retail," requiring the company to participate more directly in goods organization and turnover and bear the corresponding risks of滞销 and impairment. In 2024, Hla Group Corp.,Ltd.'s inventory scale increased from 9.337 billion yuan to 11.987 billion yuan, with a surge in the number of "non-returnable" inventories, primarily due to the inventory consolidation after Sibosi's inclusion in the consolidated statements. In 2025, the non-controlling interests of Hla Group Corp.,Ltd. were -34 million yuan (the company holds 51%/70% stakes in Sibosi/Jinghai respectively), indicating that the new businesses are still in a loss-making state. Market analysis suggests the reasons include inventory impairment provisions at Sibosi and JD-SWR Outlets still being in a ramp-up phase. Furthermore, to support Sibosi's procurement of goods from adidas, Hla Group provided担保 for accounts payable as high as 800 million yuan. Against the backdrop of the main business still being in an adjustment period, upfront investment in new businesses ultimately led to a further decline in Hla Group Corp.,Ltd.'s net profit margin: the net profit margin attributable to the parent company decreased by 0.3 percentage points year-on-year to 10% in 2025. Whether it's the channel expansion of FCC stores or the light-asset replication of JD-SWR Outlets, they ultimately need to answer the same question: when the moat of "returnable goods" is filled in, can Hla Group Corp.,Ltd. truly rely on its self-operated retail capability to support a new growth curve? The answer is not yet clear, but the time for trial and error left for Hla Group Corp.,Ltd. is not plentiful.
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