Core Insights - The opening of the new multi-brand running store, ektos, in Shanghai reflects the strategic adjustment in the store layout of the company [1] - The company has closed a significant number of stores over the past year, with a total of 5,020 operating stores as of February this year, representing an 18.3% year-on-year decrease in total store count [1][2] - The company's revenue for the fiscal year 2024/25 dropped to 27.01 billion yuan, a decline of 6.64% year-on-year, while net profit fell by 42.8% to 1.28 billion yuan [2] Store Strategy - The company has been closing stores while simultaneously increasing the sales area per store by 7.2%, aligning with the industry trend towards larger stores [1] - The new ektos store features a collection of exclusive brands and aims to create a comprehensive retail experience, including facilities for runners and community engagement [5] Brand Performance - The company's performance is closely tied to the overall sluggishness of the sports retail industry, particularly influenced by the sales performance of its core partners, Nike and Adidas, which accounted for 86.3% of total revenue [3] - Nike's revenue in the Greater China region declined by 15%, attributed to decreased foot traffic and increased market competition, while Adidas showed a 14.72% growth in the same period [3] Market Positioning - The company is focusing on niche vertical markets, expanding partnerships with over 20 sports brands, and emphasizing running and outdoor categories to align with the trend of professionalization in China's sports consumption market [3][5] - The ektos store is strategically located near popular running routes, aiming to integrate into the daily activities of runners and foster a running culture [5] Online Expansion - The company has seen double-digit growth in its direct online business, which now accounts for 30% to 40% of overall direct revenue, serving as a crucial supplement to offline channels [6] - The company operates approximately 2,300 mini-program stores and over 500 live-streaming accounts, with significant performance on platforms like Douyin and WeChat [6] Industry Trends - The company’s transformation reflects broader industry trends, moving from reliance on leading brands to a diversified brand matrix and shifting from extensive expansion to refined operations [6] - The focus on vertical markets, enhanced service experiences, and the importance of online channels are becoming irreversible trends in the sports retail industry [6]