After the long-term customer, US sports goods retailer The Sports Authority Inc., announced its application for bankruptcy protection, Under Armour Inc., the second largest sportswear manufacturer in the US, was deeply affected and reaffirmed its 2016 fiscal year performance expectations.
Based on the current situation, Under Armour Inc. maintained an annual revenue increase of 25% from FY2015 to US$4.95 billion and operating profit rose by 23% year-on-year to US$503 million. These forecasts were made when the Group released its financial statements for the fourth quarter of 2015 and the full year in late January.
As for the bankruptcy of The Sports Authority Inc. due to the loss of e-commerce competition and poor operation, the debt accumulated to 1.1 billion US dollars. The company announced its bankruptcy and immediately closed its sales promotion in 200 stores. Unless there are buyers, the group will close 140 stores and 2 logistics centers during the bankruptcy reorganization.
In external documents, Under Armour Inc. stated that it will provide assistance during the restructuring of The Sports Authority Inc., and in order to offset the impact of the latter's bankruptcy on its own performance, the group will continue to The Sports Authority Inc. Selling products will also increase sales to other channels and customers. The group expressed its belief that the bankruptcy of The Sports Authority Inc. will not materially affect its accounts receivable.
The Sports Authority Inc.’s insolvency documents showed that it owed $23 million to Under Armour Inc.’s An Dema Group and also owed $48 million to Nike Inc.’s Nike Group.
Xiao Bian reviews: The result is that the main customer's mismanagement has a direct impact on the core interests of the upstream suppliers. On the one hand, the UA's approach seems to protect the Sports Authority. On the other hand, it can also be seen as a brand dealer. Business anxiety and helplessness.
Author: plum part reprint Source: Global shoes network
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